Insights

Bryan Novak, Astor IM CEO, gives an overview of the Astor Active Income Strategy and why it is a great fit for your clients’ in todays market!

In the current landscape of fixed income investments, the act of purchasing bonds feels more akin to making a strategic trade rather than simply seeking steady income, especially when extending the duration beyond a year or two. Following the Global Financial Crisis, the markets were coddled with suppressed rates and essentially non-existent inflation. Markets were so accustomed to the new, lower for longer rate environment that they revolted against the Fed’s attempt to normalize rates in 2018. Rates plunged back to ground-floor levels post Covid. This rate suppression, coupled with a belief that inflation is secularly depressed, was why it took extensive inflation prints in 2021 for investors and traders, and indeed the Fed to believe rates had to go higher. Now, investors face another issue. In January, December ’24 Fed Funds futures were pricing in a substantial decline in the Fed Funds target rate of almost 1.5% by year end 2024; six cuts. This was in large part due to broadening disinflation and the idea that secular forces (population decline, productivity from AI) would win out.

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