What The End Of The Credit Cycle Means For Markets
Equity markets often look at credit markets for direction given the credit cycle tends to closely follow the economic cycle.
This is important because the credit cycle looks at how much growth is being generated across the global economy, the profitability of companies, the level of borrowing costs and input costs for these companies. Why this is important is because the closer we are at towards the end of the cycle the tighter conditions get for companies and individual to borrow.
Informed Investor recently interviewed Pilar Gomez-Bravo, the Director of Fixed Income Europe for MFS, who discussed the impact of the changing credit cycle.
In this video we discuss:
- The end of the credit cycle
- The unchartered territory of quantitative tightening
- The expectation of market volatility
- The US’s unusual end of cycle fiscal stimulus
- The potential for central bank policy mistakes
- Liquidity concerns around credit markets.
Pilar Gomez-Bravo, CFA, is an investment of officer, director of Fixed Income – Europe at MFS Investment Management® (MFS®). She is also a fixed income portfolio manager with oversight of the firm’s Global Fixed Income Multi-Sector and Global Credit portfolio management teams. She is based in MFS’ London of office.
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Tim McGowen is the co-founder of informedinvestor.com.au. He was previously the founder of Fortitude Capital the Hedge fund of the Year in 2008 & 2009. More recently he was a global Portfolio Manager for PM Capital.