Alpha Exchange

With one of the largest repricings in fixed income in decades underway, Brij joins me for a wide-ranging conversation on monetary policy, inflation, the wealth effect and where he sees opportunity across global bond markets.We begin with a provocative question: what if interest rates have become more effective at influencing financial markets than the real economy? Here, Brij argues that the traditional relationship between rates and business investment has weakened considerably. Ultra-low and negative real rates did not necessarily generate the productive investment policymakers hoped for. Instead, they helped encourage greater financialization, from household leverage and corporate stock buybacks to private equity activity and, more recently, government borrowing.That leads us to inflation and Brij's argument that today's remaining price pressures are increasingly connected to wealth rather than wages. With an enormous amount of household wealth tied to equities, particularly among older generations, we exp