European and Japanese government bonds are looking more attractive than U.S. debt for investors in those countries, where yields are up and the policy outlook appears more stable.
The dispute between Elon Musk and Peter Navarro comes as many companies, nations, and trade groups are expressing frustration over the uncertainty around how to best negotiate a reduction to Trump’s tariffs.
UBS expects the premium investors require over U.S. Treasuries rates to reach 160–170 bps for high-grade debt and 600–650 bps for junk debt by midyear.
Given the steep plunge in Tesla shares this year, the AFT president is urging money managers to “safeguard retirement assets” and urgently review their current holdings in electric carmaker Tesla, which is a target of political protests amid growing animosity for the brand.
“When you look at the balance of the dual mandate right now, it is certainly much more challenging. I think the Fed is going to have to practice much more patience from here.”
Fed officials must decide this year whether to lower interest rates further to support the economy, or keep them elevated for longer to contain inflation. First they need to determine what proportion of inflation is tariff-related and whether that increase is temporary.
