2024-02-21 14:19:28 ET
Summary
- The consensus is turning against floating-rate securities but a move away from them is much too soon in our view.
- Recent data, such as strong payrolls and increased average hourly earnings, suggests that the Fed may take time to kickstart the rate cutting cycle.
- Also, markets have already priced in substantial rate cuts, leading to a significant drop in long-term rates, creating a potential risk for a back-up in longer-term rates.
- We highlight several floating-rate securities that remain appealing in the current market.
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9-11% Yielding Floating-Rate Securities For A Slow-Go Fed