RUSH TRANSCRIPT Thick head ░░░░░░░░ investment grade credit strategy ░░░░░░░░ in real and before ░░░░░░░░ could get into it ░░░░░░░░ just wish bitten into ░░░░░░░░ ear You ve completed ░░░░░░░░ iron man dwight salons ░░░░░░░░ Last October I come ░░░░░░░░ the office There s ░░░░░░░░ conditioning and I get ░░░░░░░░ foot down and not ░░░░░░░░ for like 13 hours ░░░░░░░░ so What s the ░░░░░░░░ guess the best try ░░░░░░░░ on iron man triathlon ░░░░░░░░ ever competed in What ░░░░░░░░ what s what s ░░░░░░░░ favorite My boss this ░░░░░░░░ it s a very ░░░░░░░░ course but it was ░░░░░░░░ your favorite I mean ░░░░░░░░ the event fun other ░░░░░░░░ the gruelling 13 hours ░░░░░░░░ exercise If great once ░░░░░░░░ s over it s ░░░░░░░░ What s it s ░░░░░░░░ I I I just ░░░░░░░░ t understand these people ░░░░░░░░ to something like I ░░░░░░░░ of understand Natalie here ░░░░░░░░ mean it just seems ░░░░░░░░ the Federal Reserve here ░░░░░░░░ discussions kind of migrated ░░░░░░░░ how high the Federal ░░░░░░░░ will go to I ░░░░░░░░ how long the Federal ░░░░░░░░ will stay at these ░░░░░░░░ What what s the ░░░░░░░░ market telling you The ░░░░░░░░ markets telling us that ░░░░░░░░ is going to stay ░░░░░░░░ highest level since last ░░░░░░░░ at by point seven ░░░░░░░░ percent the well It ░░░░░░░░ not be good for ░░░░░░░░ of the companies that ░░░░░░░░ to come to the ░░░░░░░░ markets the fun themselves ░░░░░░░░ s actually not bad ░░░░░░░░ investors to be getting ░░░░░░░░ the six percent an ░░░░░░░░ grade corporate bonds So ░░░░░░░░ do you expect in ░░░░░░░░ of like that Debate ░░░░░░░░ I think bill dudley ░░░░░░░░ one side and Morgan ░░░░░░░░ on the other Are ░░░░░░░░ looking at continued selling ░░░░░░░░ will yield keep going ░░░░░░░░ Do you think yields ░░░░░░░░ to come back down ░░░░░░░░ a bit but they ░░░░░░░░ test that poor fifty ░░░░░░░░ I wouldn t be ░░░░░░░░ to see them shoot ░░░░░░░░ there but we have ░░░░░░░░ the bulk of the ░░░░░░░░ a good rise in ░░░░░░░░ rates I think so ░░░░░░░░ so and thus there ░░░░░░░░ be thinking about getting ░░░░░░░░ little bit that thunder ░░░░░░░░ rates now by getting ░░░░░░░░ little longer duration Special ░░░░░░░░ table We think a ░░░░░░░░ landing is most likely ░░░░░░░░ maybe even know landing ░░░░░░░░ landing on the a ░░░░░░░░ the plane someone the ░░░░░░░░ landing could be trickier ░░░░░░░░ that s a higher ░░░░░░░░ longer so that could ░░░░░░░░ a little bit more ░░░░░░░░ her I kind of ░░░░░░░░ to get this recession ░░░░░░░░ and over with that ░░░░░░░░ can move on but ░░░░░░░░ re like that in ░░░░░░░░ date of uncertainty here ░░░░░░░░ people think growth could ░░░░░░░░ celebrate inflation could react ░░░░░░░░ and what happens then ░░░░░░░░ the Fed have to ░░░░░░░░ rates again Time but ░░░░░░░░ we re close to ░░░░░░░░ end but they could ░░░░░░░░ them higher for longer ░░░░░░░░ that s also good ░░░░░░░░ because they don t ░░░░░░░░ the cut That means ░░░░░░░░ economy is going along ░░░░░░░░ unemployment still healthy So ░░░░░░░░ s not really terrible ░░░░░░░░ the market So real ░░░░░░░░ are what I mean ░░░░░░░░ Keane has been watching ░░░░░░░░ rates forever but the ░░░░░░░░ started As well right ░░░░░░░░ we re looking at ░░░░░░░░ think one point eight ░░░░░░░░ point nine percent of ░░░░░░░░ 10 year does that ░░░░░░░░ to climb Top there ░░░░░░░░ kind of where fair ░░░░░░░░ as on their tenure ░░░░░░░░ of around four percent ░░░░░░░░ roughly two percent real ░░░░░░░░ and two percent extra ░░░░░░░░ that one point eight ░░░░░░░░ point nine as we ░░░░░░░░ getting close to fair ░░░░░░░░ on a real rate ░░░░░░░░ means the market starting ░░░░░░░░ accept that we re ░░░░░░░░ to have this prolonged ░░░░░░░░ of of you know ░░░░░░░░ Are the two year ░░░░░░░░ Four point nine three ░░░░░░░░ You know after that ░░░░░░░░ we all had last ░░░░░░░░ while you you got ░░░░░░░░ in equities were fixed ░░░░░░░░ sit near four point ░░░░░░░░ three percent for copiers ░░░░░░░░ doesn t seem like ░░░░░░░░ worst deal in the ░░░░░░░░ is our should ago ░░░░░░░░ wants to go further ░░░░░░░░ If here because you ░░░░░░░░ t you then you ░░░░░░░░ reinvestment risk right Do ░░░░░░░░ Risk that we are ░░░░░░░░ a lot of investors ░░░░░░░░ run by further out ░░░░░░░░ curve to lock in ░░░░░░░░ longer interest rates for ░░░░░░░░ particularly in the corporate ░░░░░░░░ What s interesting there ░░░░░░░░ whether you re buying ░░░░░░░░ a two year corporate ░░░░░░░░ a 30 year corporate ░░░░░░░░ re getting roughly the ░░░░░░░░ yield of five point ░░░░░░░░ percent currently in use ░░░░░░░░ seen that favoritism for ░░░░░░░░ duration bonds but also ░░░░░░░░ aren t wanting to ░░░░░░░░ in those late Those ░░░░░░░░ offer longer so they ░░░░░░░░ issuing shorter in the ░░░░░░░░ Earlier about the relationship ░░░░░░░░ keeping rates higher for ░░░░░░░░ and also running off ░░░░░░░░ balance sheet both kind ░░░░░░░░ doing the same thing ░░░░░░░░ but we ve had ░░░░░░░░ lot of people well ░░░░░░░░ neil grossman complaining that ░░░░░░░░ Fed is running the ░░░░░░░░ sheet off quickly enough ░░░░░░░░ do you think about ░░░░░░░░ te verses raising rates ░░░░░░░░ how they work together ░░░░░░░░ the more effective approach ░░░░░░░░ they have been a ░░░░░░░░ bit slow in there ░░░░░░░░ By think that more ░░░░░░░░ tool is just going ░░░░░░░░ be to continue to ░░░░░░░░ rates are keep them ░░░░░░░░ for longer but we ░░░░░░░░ starting to see some ░░░░░░░░ in the system here ░░░░░░░░ spread to reach their ░░░░░░░░ a little a few ░░░░░░░░ ago but they re ░░░░░░░░ to give back lid ░░░░░░░░ there are some cracks ░░░░░░░░ the system and there ░░░░░░░░ still that delayed reaction ░░░░░░░░ the feds hikes Do ░░░░░░░░ think the cutie is ░░░░░░░░ to continue I mean ░░░░░░░░ they From wherever you ░░░░░░░░ I think like a ░░░░░░░░ dollars right now They ░░░░░░░░ aren t gonna get ░░░░░░░░ to where they were ░░░░░░░░ All of this out ░░░░░░░░ eat a place are ░░░░░░░░ as head of investment ░░░░░░░░ credit strategy natalie are ░░░░░░░░ kind of get to ░░░░░░░░ level of the are ░░░░░░░░ some sectors you like ░░░░░░░░ here Guys doing the ░░░░░░░░ Financial sector is a ░░░░░░░░ right now so we ░░░░░░░░ liking The energy sector ░░░░░░░░ me see value Also ░░░░░░░░ some of the utilities ░░░░░░░░ have come back to ░░░░░░░░ It s like the ░░░░░░░░ crisis Never even happened ░░░░░░░░ year they ve been ░░░░░░░░ to issue into the ░░░░░░░░ spreads are getting back ░░░░░░░░ where they were pre ░░░░░░░░ Valley So there s ░░░░░░░░ you know some dinner ░░░░░░░░ in that sector which ░░░░░░░░ think may dry valuations ░░░░░░░░ there whereas the demand ░░░░░░░░ high quality credit outside ░░░░░░░░ financial there s very ░░░░░░░░ So we think that ░░░░░░░░ a more defensive play ░░░░░░░░ we do get a ░░░░░░░░ Your landing than that ░░░░░░░░ there places are their ░░░░░░░░ that you like specifically ░░░░░░░░ you just like Some ░░░░░░░░ trip will be energy ░░░░░░░░ we still find attractive ░░░░░░░░ because more that game ░░░░░░░░ name selection here so ░░░░░░░░ yield Even there is ░░░░░░░░ high yield which is ░░░░░░░░ You know even though ░░░░░░░░ s also getting close ░░░░░░░░ the tapes on the ░░░░░░░░ but you can t ░░░░░░░░ with that Eight percent ░░░░░░░░ and the quality of ░░░░░░░░ highest in that has ░░░░░░░░ over time and actually ░░░░░░░░ lot of those names ░░░░░░░░ still potential candidates for ░░░░░░░░ into the investment grade ░░░░░░░░ and we ve seen ░░░░░░░░ few of those already ░░░░░░░░ place like of occidental ░░░░░░░░ are so where would ░░░░░░░░ avoid right here.