Markets Happy Hour Podcast August 20, 2026 - A Ferocious Ferragosto - with guest Anwiti Bahuguna

In this week’s Markets Happy Hour Podcast we are joined by Anwiti Bahuguna Co-CIO of Northern Trust Asset Management, who has had a long history of multi-asset investment for a range of institutional and wealth management clients. The title of the podcast refers to the "Ferragosto" phase of Eurosummer, which has been tumultuous and newsfilled, and quite ferocious bot in terms of its heat and its pace. Discussing inflation, Anwiti argues that the current AI buildout is predominantly inflationary, and we discuss how this translates into an underweight to bonds in the multi-asset programmes that she runs at Northern Trust Asset Management. The economy is fundamentally strong, which is shoring up equity markets and driving them to new highs, she stresses that the cyclical forces have been weaker while structural forces remaining quite robust. This disconnect is evident in the bond market when we compare developed markets, which in the past week have seen rates gap out to a 19 year high in the case of the US 30 year. We reflect on the two consecutive Fed interventions (the first one around the Yen and the second one around bond buying in the long end of the US) in the bond market as revealing as to the importance that is placed on shoring up the fixed income market (a theme echoed during our Europe-featured bonus podcast also launched today). We also ask if the initial negative reaction to the Fed communication schedule is premature - given the very early stage of the tenure of the new Chair. Anwiti suggests that any change would be received with some trepidation, and that this does not necessarily point to a Fed that is "losing the room". Turning to equity markets we strip out the tech effect and see that under Trump 2.0 equity markets have been broadly strong. This should not suggest, however, that other sectors are not exposed to AI, it does continue to underpin all sector momentum. Looking on a global level - we discuss the earnings strength on a global front, and point to the earnings growth in Emerging Markets, Europe and Japan, and look to the relatively strong performance of emerging markets as a whole. There are of course exceptions here - losers as well as winners - in particular in India, which has been hugely boosted by outsourcing recently. This has recently seen some attrition led by AI. To conclude we discuss the cracks in the current positive momentum, suggesting that both the higher yields present in hyperscaler credit as well as the hesitation regarding private credit segment all point to a healthy scepticism regarding boundless capex spend, as well as the potential for some loans to go bad. The suggests that the biggest "scorecard" for private credit is what is happening in the investment grade market and the reckoning there.