LQD - BANX: Higher For Longer? No Problem

2024-03-28 17:13:05 ET

Summary

• Inflation data suggests rate cuts may be delayed from prior expectations, highlighting the importance of maintaining some positions in less interest rate-sensitive areas.
• ArrowMark Financial Corp has benefitted significantly from rising rates as the underlying portfolio's income generation rose materially leading to special distributions for investors in 2023.
• BANX is more of an unusual CEF, and that can add some further risks to consider, but the discount remains attractive for that added risk at around 9%.

Written by Nick Ackerman, co-produced by Stanford Chemist.

With hotter-than-expected inflation data coming in over the last week for both consumers and producers, it's a good reminder that projected rate cuts may not materialize as soon as expected . The timeline changes as data comes in, and this latest data starts to push the probability of rate cuts later into 2024....

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