News

Jinse Finance reported that Maulik Bhansali, Senior Portfolio Manager at Allspring Global Investments, stated that what has a greater impact on the credit market is not the 25 basis point rate cut, but rather the "Summary of Economic Projections." These data indicate that there may be two more rate cuts this year, while GDP growth expectations have been slightly raised. Despite growing concerns about the labor market, the unemployment rate is expected to decline slightly. All these factors combined suggest that the economy may continue to achieve a soft landing, which is very favorable for the credit market. Yields remain attractive, especially at the longer end of the curve, which should keep investors focused on the credit market despite high valuations. What we need to pay attention to now is that, as the rate-cutting cycle restarts and the stock market reaches new highs, leveraged M&A activity may accelerate, which could catch some credit investors off guard.

Jinse Finance reported that the first interest rate cut by the Federal Reserve in nine months triggered a rise in US Treasury bonds, as the market expected the Fed to launch a series of aggressive rate cuts to support the economy. However, Fed Chairman Powell stated that Wednesday's rate cut was a risk management decision, and there is no need to adjust rates rapidly; the Fed will make decisions on a meeting-by-meeting basis. This cautious statement dampened market hopes for significant rate cuts, causing US Treasuries to fall and yields to rise. Gennadiy Goldberg, Head of US Rates Strategy at TD Securities, said that Powell was reluctant to express an overly dovish stance, which affected the direction of interest rates, especially when Powell mentioned that this rate cut was an "insurance" measure.