Investments

Concerns about the fast-growing $1.8 trillion private debt market have bubbled up this year as redemption requests from retail funds accelerated.

Interest-rate swaps showed traders have priced in about a 70% chance of a Fed rate hike by April 2027. That marked a sea-change from before the Iran conflict.

Hawkish votes against the policy statement, which characterized the risks to the economy as balanced, led traders to price in lower chances of a rate cut at any point before 2028.

Yields across maturities rose by four to six basis points, with short-dated tenors most sensitive to Fed rate changes leading the shift.

When Trump put pressure on the Fed this didn't lead to higher inflation expectations, but to lower Treasury yields, a fall in equity prices, a surge in gold and a weaker dollar.

Credit risk transfers, a means by which banks can move risk off their balance sheets, earned considerable bipartisan support in a House Financial Services subcommittee hearing Wednesday.

In testimony Tuesday, Warsh avoided answering questions about the near-term path of interest rates, further supporting the market's wait-and-see stance.

The move followed upbeat signals on consumer spending and the labor market, with both the ADP weekly jobs report and March retail sales beating forecasts.

Gauges of bond swings have declined almost every day since late March, as optimism has grown that the US and Iran are moving toward a agreement to end a month-long conflict.

Being a diversified global bank, Goldman Sachs was "broadly seen favorably as a relatively safe haven type of credit," said Tony Trzcinka, an investment grade portfolio manager at Impax Asset Management.

The setback pared a weekly gain for US government bonds sparked by an April 8 ceasefire agreement, which caused oil prices to tumble from near multiyear highs.

Oil remained lower by more than 10%, but the benchmark two-year Treasury note, erased its gain for the day, to yield about 3.79%.

Treasuries and gilts especially reflect unrealistic expectations that inflationary pressures will goad central banks into another 2022-style rate-hiking cycle.

Interest-rate swaps showed traders wiped out what little remained of their wagers on Fed easing after unexpectedly strong US labor market data were released Friday.

Concerns that inflation pressures will intensify drove the biggest monthly increase in 10-year Treasury yields in March since late 2024.

The $31 trillion US government debt market "has grown far faster than the quantum of bank capital," creating a gap between the supply and demand for liquidity.

The recent shift in focus toward slowing economic growth is easing fears that central banks will need to adopt an aggressively hawkish stance to control inflation.

With credit spreads widening, Apollo Debt Solutions, or ADS, obtained a $500 million credit line that it can use to snap up more loans at an opportune time.

Unlike most CLOs, the deal is a so-called "static" transaction, with cash flows from a fixed pool of loans rather than an actively traded portfolio.

While the biggest amount of unwinds occurred on March 2, the new positions added since then have broadly signaled short positions, targeting higher Treasury yields.