FICC Focus Credit Crunch: France, Tariffs, Fed, UK: Credit Always Resilient
Sep 10, 2025
Iain Stealey, International CIO of Global Fixed Income at JPMorgan Asset Management, shares his insights on the strength of credit markets amidst global challenges. He discusses how credit outperformed equities during crises in France and the UK, emphasizing its resilience against economic fluctuations. The conversation delves into the impact of US Fed policies, inflation concerns, and Europe's fiscal pressures. Stealey also highlights investment strategies in fixed income sectors, providing a hopeful outlook for corporate credit amidst turbulence.
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Gilt Moves Driven By Inflation Not Only Fiscal Fears
- Gilt yields appear high versus peers and reflect inflation more than fiscal profile; 10-year gilt is the key driver for credit.
- Stealey views current 10-year gilt levels as an attractive entry if inflation falls and BOE eases.
No Recession, Just Subtrend Growth
- Base case is no recession in 2025; expect subtrend growth with easing central banks and fiscal support.
- This backdrop is favorable for credit fundamentals and spreads remaining supported.
Credit Volatility Far Lower Than Rates
- Realized credit volatility is at least three times lower than rates since the pandemic, making credit a safer fixed-income haven.
- Mahesh Bhimalingam highlights credit's lower volatility and resilience through major crises.