Fidelity Answers: The Investment Podcast
Sep 30, 2026 · 38 min · 11 segments
Worries about public debt have come back to haunt markets, along with a new stream of issuance from the tech companies spending billions on AI. Yet with yields higher than they've been in years, at…
Seb Morton-ClarkHost
Patrick Graham
And the sort of question that we posed at the top here about how close we might be to some sort of a turning point for fixed income.
I mean, I think in the main, I'd be quite cautious still about longer duration investments.
You know, quite a bit of this inflationary impulse is yet to kind of come through the pipeline.
And we've also had some sort of changes in sort of, you know, particularly the Fed's approach, which makes me kind of cautious about the U.S. rates market.
You've got a bit more at the short end, you've got a bit more sort of certainty about how the ECB and the Bank of England perform.
But yes, I sort of nibble towards some opportunities maybe there in Euro duration.
I mean, a large part of that is because we keep sort of mentioning in passing, but, you know, the kind of growth backdrop is pretty good, right? So if we're thinking about, you know, Salman talked about the very big sort of debt burden of the developed countries, then, you know, how can you outgrow that with better nominal GDP growth? So that's the sort of kernel of kind of optimism within all of this.
At some point, there are probably going to be productivity gains from AI as well.
You know, we could... there's some hope of us kind of growing into our debt via this route.
Maybe from a sort of slightly more positive fixed income lens, I think the current rate of the economic growth, nominal growth in the US in particular, is really high and way above trend.
And if we're right, if Tim and I are right, that that basically explains where bond levels and bond yields are.
And the sort of question that we posed at the top here about how close we might be to some sort of a turning point for fixed income.
I mean, I think in the main, I'd be quite cautious still about longer duration investments.
You know, quite a bit of this inflationary impulse is yet to kind of come through the pipeline.
And we've also had some sort of changes in sort of, you know, particularly the Fed's approach, which makes me kind of cautious about the U.S. rates market.
You've got a bit more at the short end, you've got a bit more sort of certainty about how the ECB and the Bank of England perform.
But yes, I sort of nibble towards some opportunities maybe there in Euro duration.
I mean, a large part of that is because we keep sort of mentioning in passing, but, you know, the kind of growth backdrop is pretty good, right? So if we're thinking about, you know, Salman talked about the very big sort of debt burden of the developed countries, then, you know, how can you outgrow that with better nominal GDP growth? So that's the sort of kernel of kind of optimism within all of this.
At some point, there are probably going to be productivity gains from AI as well.
You know, we could... there's some hope of us kind of growing into our debt via this route.
Maybe from a sort of slightly more positive fixed income lens, I think the current rate of the economic growth, nominal growth in the US in particular, is really high and way above trend.
And if we're right, if Tim and I are right, that that basically explains where bond levels and bond yields are.
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