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Falling into Place: A Coronacession Election

COVID-19 Insights September 04, 2020
COVID-19 Insights September 04, 2020

 

 


Massive fiscal and monetary stimulus have pushed investors out the risk curve. Equity markets are at or near record highs and corporate credit spreads have retraced almost 90% of the widening, but the market is bifurcated between the winners and the losers. Not only are the equity and credit markets bifurcated but the employment market is as well. With the Fed now committed to allowing employment to rise above estimates of its maximum levels, and inflation to run modestly above 2% to make up for past shortfalls, the rates market is priced to a ‘Fed on hold’ for the better part of five years. Several risk events are on the horizon including uncertainty surrounding the integrity of the U.S. election process, potential delays in the election results, the election outcome and its implications for fiscal policies, the deficit, employment and growth.

Listen to the latest installment of Macro Horizons, Margaret Kerins with Ian Lyngen, Greg Anderson, Stephen Gallo, Dan Krieter, Ben Reitzes and Ben Jeffery from our FICC Macro Strategy team where they will discuss their outlook for U.S. rates, investment-grade spreads and the U.S. dollar heading into the U.S. elections and beyond.


About Macro Horizons

Macro Horizons delivers relevant and insightful commentary to help investors navigate the ever changing global market landscape.

Our BMO Fixed Income, Currencies, and Commodities (FICC) Macro Strategy group and other special guests provide weekly and monthly updates on the FICC markets through three Macro Horizons channels; US Rates - The Week AheadMonthly Roundtable and High Quality Spreads Roundtable.


Visit bmo.com/macrohorizons for more great episodes or subscribe today iTunesGoogle podcastsStitcherSpotify 

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Margaret Kerins, CFA Head of FICC Macro Strategy
Ian Lyngen, CFA Managing Director, Head of U.S. Rates Strategy
Greg Anderson Global Head of FX Strategy
Stephen Gallo European Head of FX Strategy
Dan Krieter, CFA Director, Fixed Income Strategy
Benjamin Reitzes Director, Canadian Rates & Macro Strategist
Ben Jeffery US Rates Strategist, Fixed Income Strategy
Dan Belton Vice President, Fixed Income Strategy, PHD

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