VTC - Our Christmas Shopping List (And Some 2023 Prognostications)

Summary

• 1 or more years of additional interest-rate duration in ‘23 vs. ‘22, to be grown over time: As central banks slow, or pause, their tightening cycles, in sympathy with slowing economic growth and inflation.
• 6% to 6.5% of portfolio carry potential (including anticipated curve rolldown): Without needing to take on much duration, credit, convexity or illiquidity risks.
• 11% carry (including rolldown) potential in U.S. High Yield, for those able to venture into the right places: Keeping in mind that defaults will probably rise off record lows, making selectivity critical.

For further details see: