Kelsey Berro

Emerging market economies have proven resilient to global shocks and offer investment opportunities where positive fundamentals are not yet fully priced into the market, making them attractive for active management.

Berro highlighted the robust demand for bonds from hyperscalers (like Google) and mentioned Broadcom's deal with Google to supply custom AI chips as an example of ongoing strategic investment. In a stable macro and Fed policy environment, demand for high-quality issuers in the tech/AI ecosystem remains strong. These companies are seen as financing long-term growth initiatives that the market is willing to fund. The capital markets access and continued investment in AI infrastructure are positive for the involved companies' growth trajectories. A sharp, unexpected tightening of financial conditions that closes the capital markets window.

Berro highlighted the robust demand for bonds from hyperscalers (like Google) and mentioned Broadcom's deal with Google to supply custom AI chips as an example of ongoing strategic investment. In a stable macro and Fed policy environment, demand for high-quality issuers in the tech/AI ecosystem remains strong. These companies are seen as financing long-term growth initiatives that the market is willing to fund. The capital markets access and continued investment in AI infrastructure are positive for the involved companies' growth trajectories. A sharp, unexpected tightening of financial conditions that closes the capital markets window.

Berro notes that shelter inflation (rents) and the "Indeed Wage Tracker" are at cycle lows, supporting a disinflation narrative. Rajappa adds that despite sticky inflation, the "path of least resistance" for yields is lower due to geopolitical flight-to-safety. Paul predicts a negative jobs print next week. If the labor market misses expectations significantly (Paul) and shelter costs continue to stagnate (Berro), the Fed's "higher for longer" narrative collapses. Investors are already hedging for a break below 4% on the 10-year. LONG. Duration is the hedge against the "hard landing" or "risk-off" scenario. Sticky inflation in services (healthcare/airfare) mentioned by Rajappa prevents the Fed from cutting.

Berro notes that shelter inflation (rents) and the "Indeed Wage Tracker" are at cycle lows, supporting a disinflation narrative. Rajappa adds that despite sticky inflation, the "path of least resistance" for yields is lower due to geopolitical flight-to-safety. Paul predicts a negative jobs print next week. If the labor market misses expectations significantly (Paul) and shelter costs continue to stagnate (Berro), the Fed's "higher for longer" narrative collapses. Investors are already hedging for a break below 4% on the 10-year. LONG. Duration is the hedge against the "hard landing" or "risk-off" scenario. Sticky inflation in services (healthcare/airfare) mentioned by Rajappa prevents the Fed from cutting.

Berro notes that shelter inflation (rents) and the "Indeed Wage Tracker" are at cycle lows, supporting a disinflation narrative. Rajappa adds that despite sticky inflation, the "path of least resistance" for yields is lower due to geopolitical flight-to-safety. Paul predicts a negative jobs print next week. If the labor market misses expectations significantly (Paul) and shelter costs continue to stagnate (Berro), the Fed's "higher for longer" narrative collapses. Investors are already hedging for a break below 4% on the 10-year. LONG. Duration is the hedge against the "hard landing" or "risk-off" scenario. Sticky inflation in services (healthcare/airfare) mentioned by Rajappa prevents the Fed from cutting.