Credit is the Next Shoe to Drop

Anne Walsh, Chief Investment Officer of Guggenheim Partners Investment Management, joins Bloomberg TV to discuss the latest inflation data, the economic cycle, and portfolio positioning.

Key Takeaways:

  • We expect to see inflation continue to come down, but it will not be in a straight line.
  • The markets have been focused on rates but have not priced in a downturn in credit.
  • We will see more pressure on margins as the recessionary cycle continues.
  • Expect to see rolling recessions throughout the economy; commercial real estate is already in recession.
  • Companies with cash will come through the cycle pretty well, but idiosyncratic credit risk is where we will see problems.
  • It is a good time to be invested in higher quality credit, particularly AAA and AA structured credit tranches.

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