FOMC, Earnings, Buying the Dip Selectively

Key Points

5 rate hikes priced in following the Jan FOMC meeting, terminal rates and real rates remain sticky and below previous cycle levels

Earnings and forward guidance have been mixed, contributing to the risk-off sentiment apart from rates vol; US 2022 EPS consensus estimate remains in the high single digits, a catalyst to keep credit metrics in check in a rising cost of debt environment

Credit valuation is cheaper now, but not every dip is treated the same – staying selective in buying it

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