U.S. Trade Policy at the Center of Global Economic Tensions
PGIM Fixed Income’s Lead Geopolitical Analyst, Mehill Marku, reacts to President Trump's April 2, 2025 announcement on reciprocal tariffs.
In an environment of pervasive macro risks, our second quarter market outlook looks at the factors that may support fixed income performance amidst the relentless uncertainty as well as the divergent trends across global markets. We also provide an assessment of the macroeconomic backdrop and share our sector views for the second quarter and beyond.
Learn more about the three key themes that shape our quarterly fixed income outlook:
As we referenced in Q1, the 2022 bear market hoisted yields to levels not seen in more than a decade, positioning fixed income markets—particularly the higher yielding sectors—for an extended period of solid returns. That backdrop remains in Q2 as do the uncertainties that will rattle markets over the near term. Bottom line: Bonds are positioned for solid returns, and they should outperform cash and equities if serious downside risks materialize.
Divergent markets can create value for those moving across regions, sectors, and issuers. In Q1, “American Exceptionalism” paused, boosting U.S. bond returns. Simultaneously, European credit outperformed on an excess return basis amidst expectations for accelerating European growth. Ongoing policy confusion seems destined to continue to prompt bouts of market turbulence that precipitates relative value opportunities.
The post-COVID bond market has been prone to dramatic overreactions and course corrections as participants struggle to understand the post-pandemic paradigm. The lesson for investors is clear: don’t confuse extreme market movements with changes in fundamental market trends. Rely on research and analysis to distinguish the market spasms from true changes in value and capitalize on reversions back to fundamentals.
PGIM Fixed Income’s Lead Geopolitical Analyst, Mehill Marku, reacts to President Trump's April 2, 2025 announcement on reciprocal tariffs.
This episode of All the Credit® kicks off our new sub-series, Credit Markets in Transition, with an in-depth look at the rapidly growing ABF sector.
Explore 10 fundamental factors at play in support of European peripheral sovereign bonds.
This blog shares our key takeaways about each asset class of securitized products based on the learnings made and the meetings had at SFVegas 2025.
This episode of All the Credit® highlights liability-driven strategies in our new sub-series, Credit Markets in Transition.