Guggenheim 2Q Fixed-Income Outlook: Expect Higher Volatility With Spreads Tight and Evolving Monetary and Fiscal Policy

NEW YORK, May 17, 2017 -- Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners, today provided its Second Quarter 2017 Fixed-Income Outlook, “A Time for Caution in Complacent Markets.” Among the highlights in the 32-page report:

• In addition to two more hikes this year, we expect the Federal Reserve (Fed) will raise rates four more times in 2018.
   
• The Fed is plotting a strategy to reduce its balance sheet, likely to be announced in September. This should pressure yields higher in the short end and belly of the curve, which is where most of the new Treasury issuance is likely to come.
   
• With the Fed set to continue to raise interest rates, and at a faster pace than that which is priced in the markets, positioning for a flatter yield curve will remain a major theme in our portfolios.
   
• Our view on the global macroeconomic environment is positive, which should support strong credit fundamentals for several years. China has stabilized, Europe is recovering, and corporate earnings in the U.S. are rising.
   
• We are focused on the legislative complexities of passing President Trump’s pro-growth agenda. Failure to put his plans into effect in a timely manner may cause markets to realize that the Trump rally is long on promise and short on delivery.

For more information, please visit http://www.guggenheiminvestments.com.

About Guggenheim Investments

Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners, with $217 billion¹ in assets across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 275+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled us to deliver innovative strategies providing diversification and attractive long-term results.

¹Guggenheim Investments total asset figure is as of 03.31.2017. The assets include $11.7bn of leverage for assets under management and $0.4bn for assets for which Guggenheim provides administrative services. Guggenheim Investments represents the following affiliated investment management businesses: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Real Estate, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited and Guggenheim Partners India Management.

Investing involves risk. In general, the value of fixed-income securities fall when interest rates rise. High-yield securities present more liquidity and credit risk than investment grade bonds and may be subject to greater volatility. Investments in bank loans securities involve special types of risks, including credit risk, interest rate risk, liquidity risk and prepayment risk.

This information herein is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. This material contains opinions of the author but not necessarily those of Guggenheim Partners or its subsidiaries. The author's opinions are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. ©2017, Guggenheim Partners, LLC.  No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Guggenheim Partners, LLC.

Media Contact 
Ivy McLemore
Guggenheim Partners 
212.518.9859
[email protected]