Are we in for stagflation and what does that mean for fixed income?
Caroline Hyde
Janet Rilling
Our base view is the economy is still on solid footing. Energy is the swing factor with potential to turn geopolitics into a macro problem.
Janet, respond to that and take us to the corporate world if we see some gyration.
Caroline Hyde
Janet Rilling
It does matter where on the curve you take duration. We would tend to favor the front end, maybe the two and five year part, to start adding duration if we see more upward pressure in rates.
At what level does oil stop becoming the noise and start becoming the main macro driver?
Isabelle Lee
Janet Rilling
If oil prices go north of $100 and stay there for some time, that starts working its way through the economy.
How do you position your portfolio to capture yield without taking too much credit risk?
Isabelle Lee
Janet Rilling
We favor high quality income. Tilt portfolio to winners (compute over software). Stay at the front end of the yield curve, not deep into lower quality like high yield.