Värde Co-CIOs Brad Bauer, Ilfryn Carstairs, and Giuseppe Naglieri share their views on the state of credit markets coming into the second half of 2024 and discuss the evolution and emergence of investment opportunities across Värde’s platform.
Please note that these views were authored at the end of Q2 2024 as part of our quarterly communication with investors and may have evolved since their publication.
MARKET OUTLOOK
The second quarter of the year saw little change in major markets as a whole, though, behind this relatively calm facade, there were some significant pockets of volatility and several developments that we believe should take on much more importance as the year progresses.
By mid-quarter, the market had effectively priced out all the expected rate cuts for 2024 and commentary was even starting to contemplate whether rate hikes may be back on the table. Alongside this, the Fed finally acknowledged that strong asset markets, economic resilience, and sticky inflation call for a more cautious policy stance – and moved its own expectation for rate cuts from three to one for 2024. Despite this hawkish shift, we would guess that the rhetoric will shift back to more cuts if the data gives any window in which to follow through on that agenda.
Confusion around the direction of monetary policy remains a key theme of the year, and we are at the point where there is no single answer across the globe.
The debate around policy rates looks to be a key driver of the markets in the second half of the year.
Media Contact
Värde Partners Communications and Public Affairs