Corporate bonds, according to an American bank executive, will survive the recent banking crisis.
In an interview with Bloomberg News that was released on Tuesday, Jed Laskowitz, chief investment officer at J.P. Morgan Asset Management, said that investment-grade credit might offer returns “in a world where growth is weak and earnings in the US are uncertain” (March 28).
Laskowitz claims that although there is still work to be done in the banking sector, the quick regulatory response this month will stop any further spread. He asserted that there is still a possibility of a rocky landing for the US economy despite recent Federal Reserve signals that tightening was set to halt.
According to Laskowitz, “those risks, for the time being, are not sufficient for us to take a big underweight position in stocks.”
“It’s critical to not pass up possibilities. There is a chance that the Fed’s tightening and a longer recession may result in a long decline in profits. But we haven’t arrived yet.
The benchmark interest rate of the Federal Reserve was increased by 0.25% last week. Although there might not be any further rate increases in the near future, some of Chairman Jerome Powell’s comments indicate a more challenging environment for both businesses and consumers.
At a press conference, Powell stated that “financial conditions seem to have tightened, and perhaps by more than the standard indices suggest.”
