Developed Countries
Our thoughts on bond positioning following this morning’s employment data.
In this Insight, we share our thoughts on yesterday’s FOMC meeting and the Fed’s likely next moves, with implications for US bond strategy.
The US DoD rolled out its first-ever industrial policy designed to reverse decades of atrophy in its military-industrial complex. This left the US with diminished access to CMM commodities and supply chains, which are now dominated by China, and an industrial ecosystem to support its war-fighting mission that risks become uncompetitive. We remain long the XME and COMT ETFs to retain exposure to CMM producers and refiners. At tonight’s close, we will get long the Invesco Aerospace & Defense ETF (PPA), anticipating increased defense spending.
When will the US also buckle under high rates? We expect a US recession to begin around mid-year. Stay defensive.
