Claim OwnershipThe Weekly Fix
Subscribed: 5Played: 45
Subscribe
© Copyright 2025 RBC Global Asset Management (U.S.) Inc.
Description
Today’s markets move fast. To keep you up to speed each week, Andrzej Skiba, CFA, Head of BlueBay U.S. Fixed Income at RBC Global Asset Management, and members of his investment team will deliver forward looking market commentary and insights into what’s driving fixed income markets over the coming week.
108 Episodes
Reverse
Divided Fed, uncertain future: Powell’s cautious tone raises questions about policy shifts ahead.Laurie Mount, Portfolio Manager with RBC GAM’s BlueBay US Fixed Income team, highlights the Federal Reserve's recent rate cut and its impact on cash strategies amid ongoing economic uncertainties.The Fed lowered the fed funds rate by 25 basis points to 3.75–4.00%, while signaling caution regarding December cuts due to labor market risks and committee divisions over inflation concerns.Fed Chair Powell warned against assuming another rate cut soon, citing a lack of data due to the government shutdown, which has already led markets to cut December rate cut predictions significantly.In response, our team is prioritizing floating-rate securities and short-term fixed-rate assets under one year, vigilantly analyzing Fed communications and economic data to adapt to evolving conditions.
Systemic risk, or just unusual events? Recent market turbulence leaves some questions about how long high valuations and tight spreads will continue.Anne Greenwood, Institutional Portfolio Manager on RBC BlueBay’s US Fixed Income team, discusses the current market landscape and opportunities for active managers.Equities at record highs and tight credit spreads indicate market resilience, despite recent jitters.Lower-quality high-yield bonds and leverage loans require caution due to deteriorating credit metrics and increased default rates.Active managers may be able to capitalize on volatility by providing liquidity and generating strong risk-adjusted returns in fundamentally stable companies.
Credit cycle deterioration? Not so fast- new earnings reports from the banking sector ease fears of financially stretched consumers and companies.John Guarnera, Senior Corporate Analyst on RBC BlueBay’s US Fixed Income Team, explores the latest data from US banks and an outlook on recent credit market developments.Third-quarter earnings from major US banks revealed stable asset quality and improved credit metrics.Banks' balance sheets remain robust, with high capital levels and strong liquidity, supporting their ability to manage potential risks.Consumer and commercial credit trends show improvement, with delinquency metrics stabilizing across prime and subprime markets.
US High Yield continues to perform well this quarter- but geopolitical volatility demands strategic positioning.In this edition of #TheWeeklyFix, Charlie Whinery, Portfolio Manager on RBC BlueBay’s US Fixed Income Team, breaks down Q3's strong performance and how his team is navigating current market dynamics.US HY delivered solid 2.4% returns in Q3 with robust $140B issuance, low leverage levels, and healthy interest coverage ratios well above historical norms. Geopolitical risks create uncertainty - Trump's tariff threats on Chinese goods sparked volatility, making front-end positioning a potential strategic advantage.
Amid a shifting market landscape, fixed income strategies are evolving to uncovervalue in key sectors.Andrzej Skiba, Head of BlueBay U.S. Fixed Income at RBC GAM, shares how his team is navigating today’s market dynamics while seeking to position for strong returns in 2026.Favoring curve steepeners for U.S. interest rate exposure, with resilience expected unless inflation drops significantly or fiscal deficits shrink unexpectedly.Generic corporate credit spreads remain unappealing, prompting a focus on idiosyncratic opportunities in sectors like California utilities, chip manufacturing, and US housing.We anticipate high single-digit returns in investment grade and high yield fixed income, supported by multiple rate cuts and U.S. growth above 2%.
New GDP data shows economic growth, but labor market and political risks keep markets on edge.Mindy Gudmundson, Institutional Portfolio Manager with RBC BlueBay’s US Fixed Income team, breaks down the latest economic data and key developments shaping markets.Second-quarter GDP revised to 3.8%, driven by strong consumer spending, while jobless claims fell, easing labor market concerns.This week’s labor market data will be critical in shaping expectations for Federal Reserve rate cuts.A potential government shutdown could delay key economic data releases but is unlikely to significantly impact the broader economy.
The Fed’s rate cut is in, just as the market expected – what’s next for the future of monetary policy? Laurie Mount, Portfolio Manager with RBC BlueBay’s U.S. Fixed Income team, unpacks the Federal Reserve’s latest rate cut, economic projections, and what it all means for investors.The Fed cut rates by 25 basis points, lowering the target range to 4.00–4.25%, with projections showing stronger growth, higher inflation, and lower unemployment through 2026–27.Diverging views among FOMC members reveal uncertainty, with projections ranging from no more cuts to a 100-basis point reduction by year-end 2025.Chair Powell described the cut as a risk management move, emphasizing a data-dependent approach amid shifting risks to labor markets and inflation.
Can Fed policy ease the housing affordability crisis?Teri Savage, Senior Mortgage Trader with RBC BlueBay’s Fixed Income team, explores the pressures on the U.S. housing market and the potential impact of upcoming policy changes.Home prices continue to outpace income growth, while 30-year mortgage rates remain stubbornly above 6%, pushing affordability to record lows.The Federal Reserve is expected to cut the Fed funds rate, which could drive down Treasury yields and, in turn, lower mortgage rates to help ease affordability pressures.Mortgage investors should remain flexible and closely monitor policy developments, as the administration prioritizes lowering rates to address housing market challenges.Understand how these dynamics could shape the housing market and investment strategies.
Senior portfolio manager Tim Leary discusses how weaker job growth and strong bond market activity, coupled with tight spreads, support expectations for a September rate cut and continued favorable conditions for fixed-income markets.Weaker job data and key events like Jackson Hole and August payrolls pave the way for a September rate cut. Strong technicals in the US bond markets persist, with significant issuance and demand driving tighter spreads, lower yields, and favorable pricing. The S&P showed minor volatility, while the Russell 2000 demonstrated stronger risk sentiment, reflecting optimism in HY markets due to overlapping names. This leads us to prefer fixed coupons over variable in fixed income credit markets.
Corporate credit spreads are at historic lows – will September’s bond supply shake up the market? Neil Sun, Portfolio Manager on the BlueBay U.S. Fixed Income team, analyzes the tightest corporate bond spreads in decades and highlights potential opportunities.Investment-grade corporate bond spreads are near 80 bps over Treasuries, driven by strong demand despite slim risk compensation.With $130-150bn in new corporate issuance expected, the market’s ability to absorb supply without widening spreads will be tested.Long-term conditions support a bullish credit stance, but near-term widening may create selective re-entry opportunities for investors.
Fed Chair Powell excited investors last Friday with hints of a potential September rate cut. What’s next for credit markets?Anne Greenwood, Institutional Portfolio Manager with RBC BlueBay’s Fixed Income team, breaks down the market reaction to the Jackson Hole Symposium.Fed Chair Jerome Powell signaled the potential for a September rate cut, citing balanced labor markets and easing inflation risks.U.S. risk assets remain well supported, but heightened uncertainty and a wide range of outcomes suggest volatility is likely to persist.It is important to maintain a cautious approach to credit risk and liquidity as markets prepare for seasonal shifts in debt supply.
All eyes are on Jackson Hole this week as investors digest recent economic data and look ahead to the Fed’s next moves.Mindy Gudmundson, Institutional Portfolio Manager with RBC BlueBay’s U.S. Fixed Income team, breaks down the latest inflation data, rate cut expectations, and what to watch ahead of Chair Powell’s Jackson Hole speech.Headline inflation dipped to 2.7%, nearing the Fed’s target, but core CPI rose to 3.1%, keeping inflation risks in focus.Markets expect a 25 bps cut in September, with more cuts likely in the months ahead.Chair Powell’s speech in Jackson Hole is expected to provide clarity on the timeline and scope of policy easing.
BlueBay Senior Trader Peter Keenan highlights key themes following the most recent inflation data release. Inflation Data Overview: July's Consumer Price Index (CPI) rose 0.2% month-over-month (headline) and 0.3% excluding food and energy, with year-over-year increases of 2.7% (headline) and 3.1% (core), aligning with expectations. Market and Fed Expectations: Markets now price a 96% chance of a 25 bps rate cut in September, up from 86% pre-CPI release. The Jackson Hole Symposium (Aug 21-23) is expected to signal further monetary easing, consistent with the Fed's potential 1-2 rate cuts this year.Economic Outlook: Despite a slowing pace of activity below 2% in late 2025, deregulation and policy easing may support economic growth into 2026. Corporate earnings have remained resilient, countering concerns of deeper economic trouble.
BlueBay Portfolio Manager Laurie Mount discusses how the fallout from Friday’s lousy jobs report could dominate Washington and Wall Street for some time.The July jobs report fell significantly below expectations, with only 73,000 jobs added versus the forecasted 104,000, while the unemployment rate rose to 4.2%, signaling a potential softening in the labor market.Treasuries rallied sharply, and markets have now fully priced in two Federal Reserve rate cuts by year-end, reflecting growing expectations for monetary easing.The FOMC's recent decision to hold rates steady saw rare dissent from two Governors, highlighting internal debate over balancing risks to growth and inflation amid ongoing tariff and labor market concerns.The Federal Reserve's data-driven approach will focus on upcoming CPI releases and jobs reports, with portfolio strategies being adjusted to prepare for potential lower interest rate environment.
Investment-grade bonds are having a strong year, but investors aren’t getting complacent.Neil Sun, Portfolio Manager on the BlueBay U.S. Fixed Income team, discusses how portfolio managers are hedging their credit exposure despite a compelling market environment.Yields remain attractive, inflows are strong, and performance is solid—even with tight credit spreads.Managers are staying cautious, holding high-conviction positions while using hedging strategies like credit default swaps and options to protect against downside risks.In today’s market, managing risk is just as important as finding yield. Strategic hedging ensures portfolios stay resilient, no matter what comes next.Staying invested doesn’t mean flying blind. Active risk management is key in tighter markets.
Fed policy and credit markets are at a pivotal moment.Andrzej Skiba, BlueBay Head of U.S. Fixed Income, gives an update on monetary policy trends and their effects on the market:The Fed is unlikely to cut rates in July but may deliver 1-2 cuts by year-end, depending on trade developments and inflation trends.Treasury markets reflect expectations of more aggressive rate cuts under future Fed leadership, supporting a preference for U.S. curve “steepeners.”Strong technicals are driving credit market activity as investors lock in yields amid limited new issuance. Active management remains essential to uncovering value in tighter spreads. As markets navigate shifting policy expectations and credit opportunities, staying agile is more important than ever.
TACO trade or GAIN trade? Markets brace for tariffs and bank earnings.Tim Leary, Senior Portfolio Manager on the BlueBay US Fixed Income team, dives into the macro and trade themes driving markets as the summer lull in new issuance takes hold. Markets are eyeing the August 1st deadline for potential 30% tariffs on Europe, with optimism that a resolution will be reached.US GSIBs and regional banks kick off 2Q earnings this week, with a focus on asset quality, macro outlooks, and shareholder distribution plans.US High Yield bond market liquidity is at record highs, with daily trading volumes up 14–19% year-over-year, signaling a more tradeable and robust market.With strong technicals, tighter credit spreads, and optimism around 2Q numbers, the market is navigating the balance between opportunity and risk.
As we pass the mid-year mark, @Andrzej Skiba, Head of BlueBay U.S. Fixed Income, breaks down how fixed income markets are shaping up for the second half of the year. With spreads at multi-year tights and bullish market positioning, the opportunity set is narrowing, but there’s still value to be found for active investors.From reallocating to sectors like insurance and utilities to exploring subordinated debt and non-agency MBS, Andrzej explains how we’re staying constructive while moderating risk. With volatility likely to rise later this summer, strategic credit hedges and tactical reallocations are keeping portfolios nimble and ready for what’s next.
Don’t fight the Fed – or the American consumer.Tim Leary, Senior Portfolio Manager on the BlueBay U.S. Fixed Income team, highlights the resilience of the U.S. consumer, with cash balances at a record $21.7 trillion and credit card utilization rates back to normal.As High Yield bonds outperform and spreads tighten, the strength of the American consumer could drive inflows into credit markets, offering opportunities for investors looking beyond equities at all-time highs.
Strong inflows. Low issuance. High cash balances. Peter Keenan, Senior Trader on the BlueBay U.S. Fixed Income team, explores why High Yield is holding strong. $5.3B in YTD inflows, led by fast-moving ETF moneyLimited new issuance – currently -18% vs. last yearElevated cash balances and muted dealer inventoriesIf geopolitical risks ease and issuance remains slow, spreads could have room to tighten from here.
Comments
Download from Google Play
Download from App Store
United States