US monetary policy outlook: Rate cuts, market dynamics, and credit opportunities
Update: 2025-07-22
Description
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.
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