FICC Focus

Global credit markets swung through war and peace, making strategic insights essential for the second half of the year. Bloomberg Intelligence’s credit strategists have their sights set on 2H, but what do their outlooks hold? In this episode of the Credit Crunch podcast, Mahesh Bhimalingam, Bloomberg Intelligence’s global head of credit strategy, hosts BI’s global credit strategy team to discuss key research, data and views from around the world. Basel Al-Waqayan (Middle East), Tim Tan and Jason Lee (Asia), Reto Bachmann (structured credit), Heema Patel (Europe) and Sam Geier (US) share their outlooks and the key themes shaping their regions. Access their research on the Bloomberg Terminal at BI STRTA, BI STRTE, BI STRTN and BI EMFIG.

The Credit Crunch podcast is part of BI’s FICC Focus series. Listen on Apple Podcasts and Spotify.

Bloomberg Intelligence Chief European Rates Strategist Huw Worthington joins Ira Jersey on this Macro Matters edition of the FICC Focus podcast to discuss the latest moves from the European Central Bank, the Bank of England and global rate markets. Worthington explains why the ECB’s recent rate hike may already look too aggressive now that oil and gas prices have fallen back, and why the market may be overpricing further tightening if euro-area inflation undershoots target in 2027 and 2028. The two also examine why Europe’s growth backdrop remains weaker than the US, how the ECB’s single inflation mandate differs from the Fed’s broader framework, and why those differences matter for yield curves and market pricing. They also discuss the UK gilt market, including the impact of political turnover, fiscal constraints and leadership changes on long-end yields, as well as the outlook for peripheral spreads in Europe. The episode closes with a look at anomalies in US SOFR curve pricing, including why Bloomberg Intelligence sees current expectations for multiple Fed hikes, followed quickly by cuts, as difficult to justify.

“LLMs give us the opportunity to kind of rethink how much expected skill we can get out of our tools and techniques,” says Jeffrey Rosenberg, managing director and senior fixed income portfolio manager for BlackRock Systematic. “If deep fundamental value investing is dedicating 10,000 hours to create ... concentrated portfolios based on an expectation of high degrees of skill, maybe we can do something similar because the technology allows us to.” This is an evolution from a model focused on maximizing small advantages, according to Rosenberg, who joins Bloomberg Intelligence’s Noel Hebert on this episode of the Credit Crunch podcast. The two discuss rates decorrelation, systematic’s peanut-butter-cup moment and iShares Systematic Alternatives Active ETF (IALT), the company’s latest liquid systematic-strategy offering.

The Credit Crunch podcast is part of BI’s FICC Focus series.

Emerging market credit index futures improve liquidity and balance-sheet efficiency, yet they also open the door to a wider range of tactical and relative-value trading opportunities. Lee Bartholomew, global head of derivative markets at Deutsche Börse, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to assess the evolution of Eurex-listed EM credit index futures, with a focus on market structure and investor adoption. Bartholomew and Sassower discuss the potential for portfolio hedging, smart-beta overlays, basis trading and short positioning, as the universe of exchange-traded and unfunded EM credit exposure evolves.

With Kevin Warsh’s first meeting as Federal Reserve chair behind him, the discourse can move to what it signals for monetary policy. Bloomberg Economics Chief US Economist Anna Wong joins Ira Jersey on this edition of Macro Matters and argues that while Warsh avoided explicit forward guidance, his emphasis was on price stability, skepticism toward forecast precision and support for a shorter policy statement all point to a more hawkish lean than many investors expected. 

They discuss whether Warsh is pushing the Fed back toward a more Greenspan-like communication style, why she believes the dot plot could eventually disappear in favor of broader forecast ranges, and how task forces on the balance sheet, inflation and data reliability could shape future policy debates. They also examine the outlook for inflation and the labor market, why Wong sees a rate hike this year as a mistake given her expectation for headline and core PCE to fall back toward target, and how Bloomberg Intelligence views current SOFR futures pricing as internally inconsistent. The episode closes with a discussion of the global backdrop, including softer oil prices, tighter policy abroad and the implications for the dollar and the US disinflation outlook.

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