Pictet's Mawby: MMT may be the last hope for policymakers

Pictet Asset Management’s head of investment grade credit Jon Mawby talks to Mike Sheen about the ‘very long in the tooth’ credit cycle, the outlook for central bank tapering, and why Modern Monetary Theory could be the last hope for policymakers

Pictet Strategic Credit was launched last year targeting opportunities arising from the distortion  in fixed income markets brought about by the coronavirus pandemic. How has the outlook for credit markets changed in that time? The situation has become a lot more acute in terms of the challenges to fixed income investors at this point in the cycle. If you look at where we are now, valuation-wise, index yields across dollars and euros, in high yield or investment grade (IG), are at, or close to, all-time lows - well through the 90th percentile for valuations. The IG index, which traditi...