I just.
I'm tickled by that. I'm hanging on by my fingers and toes to
keep my discipline. I mean, is it as tenuous as that for you
in the bond market? So maybe not for us on the research
side. We have recently been recommending that
we think clients could be patient on adding duration.
Given recent data flow, given the fact that not all Fed speakers were on board
with the cuts that some and Powell has talked about.
And so as a result of that, we recommended that investors be somewhat
disciplined and be patient and hang back a little bit.
And we feel that that patience has now been rewarded.
So we do think that it's a more appropriate opportunity now for
investors to start leaning back into the market, start leaning long.
Right now, we know that that's not a particularly popular view given the
momentum that we have seen in the market and given that rates have just sold off
so sharply. But we do think it's sensible, really
for three key reasons. Number one, we think that it's very
unlikely that the Fed hikes again this cycle.
Possible, but unlikely. Probably need to see inflation
expectations start to an anchor. And as Mike was talking about before,
we're not really seeing that yet in the break even space.
Second reason we think it's a little bit safer to lean in is because you've seen
risk assets start to wobble a little bit.
They clearly care and notice what the rates market has been doing.
And if you see more of that sensitivity at higher rates and let's say headwinds
to risk asset development, then we think that that will justify that lean in long
view. And the third reason that we think it's
it's safer now for investors to start leaning into fixed income a bit is that
we just think positioning is cleaner. The positioning surveys that we do with
our clients tell us that they're not nearly as long as they were in the
summer of last year. And that long position, investors really
being over their skis on duration allowed for such a rapid rate rise.
So we do think that those things allow for investors to have a little bit more
confidence leaning in. And hopefully Bob and others at JPMorgan
Asset Management agree with that because, you know, for those who have
been hanging on, we do start to think that losses in fixed income look
increasingly limited. If, again, the Fed's not hiking risk
assets are noticing and if you think positioning is cleaner.
