FICC Focus

Emerging market equities have outperformed the S&P 500 by over 14% over the past year, as investors take advantage of attractive valuations, falling currency volatility and a more resilient macroeconomic backdrop. Malcolm Dorson, Senior EM Portfolio Manager and Head of the Active Investment Team at Global X, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to assess the durability of thematic and idiosyncratic investment opportunities across the EM equity universe. Dorson and Sassower assess relative performance, foreign positioning and fund flows as institutional investors exhibit greater interest in moving down the EM capital structure.

With the latest energy shock pushing UK inflation higher while economic growth remains subdued, investors are questioning whether markets have priced too much Bank of England tightening. Jack Meaning, UK chief economist at Barclays, joins Bloomberg Intelligence chief US interest rate strategist Ira Jersey to discuss that and more on this Macro Matters edition of the FICC Focus podcast. Meaning explains why Barclays expects inflation to climb above 3% in the second half of 2026 but sees little evidence of the wage or second-round effects that would make the increase durable. The two discuss why keeping Bank Rate at 3.75% already represents a meaningful tightening relative to earlier market expectations and how restrictive financing conditions and labor-market slack are weighing on growth. They also explore whether improving investment intentions — including spending tied to artificial intelligence — can provide support. The conversation examines Brexit’s lingering impact, the UK’s difficult fiscal choices and why Barclays expects the Bank of England to remain on hold this year before inflation moves back toward target in 2027. The episode concludes with a look at the central bank’s upcoming quantitative-tightening decision and the debate over continuing active gilt sales.

Emerging market fund flows are accelerating as credit fundamentals continue to improve amid historically loose financial conditions, wide real yields and deteriorating US dollar demand. Genna Lozovsky, managing principal and chief investment officer of Sandglass Capital Management, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to share his outlook for special situations and distressed EM credit amid a historically tight spread environment. Lozovsky and Sassower focus on opportunities in off-the-run EM growth, distressed corporates and speculative-grade sovereign debt.

With US growth holding up and inflation still running above target, investors are weighing whether the Federal Reserve needs to tighten policy further or can afford to stay on hold. Drew Matus, chief market strategist at MetLife Investment Management, joins Bloomberg Intelligence chief US interest-rate strategist Ira Jersey to discuss this and more on this Macro Matters edition of the FICC Focus podcast. Matus argues that rate hikes would do little to address the forces currently supporting inflation while risking unnecessary damage to the broader economy, and explains why he expects the Fed to remain on hold. The two also discuss how the AI investment boom and household wealth effects are supporting US growth, why Matus sees AI as a potential source of job creation and productivity gains, and where those benefits could create opportunities across emerging markets and Japan. They also examine global fixed-income valuations, geopolitical and oil-market risks and why clearer rules governing the relationship between the Treasury and Fed — including the composition and size of the central bank’s balance sheet — could ultimately reduce uncertainty for markets.

The Macro Matters podcast is part of BI’s FICC Focus series.

Global credit markets have stayed relatively calm through war and peace, despite swings in the rates markets, making strategic insights essential. In this episode of the Credit Crunch podcast, Mahesh Bhimalingam, Bloomberg Intelligence’s global head of credit strategy, hosts our global team to discuss key research, data and views from around the world. Tim Tan and Jason Lee in Asia, Reto Bachmann from structured credit, Heema Patel in Europe and Alice Zhou in the US share their outlooks and the key themes shaping their regions. Access their research on the Bloomberg Terminal at BI STRTA, BI STRTE and BI STRTN.