Investment grade corporate bonds yielding close to 6% are compelling given a resilient economy, stable spreads, and strong investor inflows. Fixed income offers attractive risk-adjusted returns in a low-hire, low-fire economy.
There are attractive opportunities across fixed income, including emerging market debt, providing a more diversified set of options compared to the AI-dominated equity market.
The yield curve has flattened with rate hikes priced in the front end but not the long end. Under Chair Warsh the Fed is unlikely to deliver many hikes, so it is better to be slightly long duration rather than bet on curve steepening.