Asks which report (jobs or CPI) will guide investor sentiment more.
Romaine Bostick
Andrew Szczurowski
Short term, CPI report will be the focus. Long term, the bond and risk markets will focus on the labor market.
Asks about actual economic growth outlook for 2026.
Romaine Bostick
Andrew Szczurowski
We might be entering a unique era of reasonable GDP growth (~2%) that doesn't translate to labor growth.
Asks how to structure a portfolio around economic growth without labor growth.
Katie Greifeld
Andrew Szczurowski
Not the worst thing for risk assets; it's a productivity boom. On the bond side, avoid AI data center deals, stick to high-quality agency mortgages and treasuries.
Asks where in the credit market you aren't paid enough for credit risk.
Katie Greifeld
Andrew Szczurowski
In IG corporates, you're being compensated for credit risk because base Treasury yields are high, not through spreads. Spreads could stay tight like 2004-2006.
Asks for the argument favoring mortgage-backed and asset-backed securities for risk-adjusted safety.
Romaine Bostick
Andrew Szczurowski
Fed QT on mortgages keeps agency MBS spreads wide, a positive technical. Asset-backed markets don't have the same dedicated flows as IG corporates.