Guggenheim's Walsh Sees Fed Cutting Once More This Year

Anne Walsh discusses the outlook for oil, equities, and fixed income at the Milken Institute. She expects oil to stay elevated near $100 for three months due to the Iran conflict, then decline to around $80. She is positive on US equities given a resilient economy and expects one Fed rate cut later this year. She views fixed income as a rate story and recommends extending duration when the 10-year yield reaches 4.5%. - Oil base case: $100 for three months, then decline to ~$80 by year-end. - Downside risk of extended Iran conflict not yet priced into markets. - US equities viewed as resilient, having priced through the Iran conflict. - Fixed income is more a rate story than a spread story outside of technology. - Expects one Fed rate cut later this year but notes markets have priced that out. - 10-year Treasury yield anchored between high 3% and high 4%; extend duration at 4.5%. - Increased Treasury supply due to fiscal spending is lifting rates via supply-demand imbalance. - New Fed chair likely to manage interest rates differently going forward.