Market Insight
Fixed Income Update - November 2025
November 19, 2025
In this recent webinar, Chief Investment Officer, Charlie Jamieson, and Portfolio Manager, Vijay Murik. examined global and domestic markets, highlighting risks and opportunities across bonds, equities, and credit, with a focus on AI investment and the sustainability of U.S. growth.
Key take-aways
Investor uncertainty rises as key economic data remains delayed
Markets are operating in a period of limited data, with key U.S. indicators such as October employment and CPI potentially unreleased. This data scarcity underscores market uncertainty, and forthcoming releases will play a critical role in shaping investor expectations and U.S. Federal Reserve policy decisions.
Signs of economic softness
Excluding AI-driven investment, the U.S. economy is showing signs of weakness. ISM indices and other macro indicators point to near-recessionary conditions, while concentrated gains in both the technology and AI sectors obscure the underlying fragility of broader economic activity.
Policy uncertainty weighs on markets
The U.S. Federal Reserve remains internally divided, and upcoming appointments could add further policy uncertainty. Markets are pricing in a December rate cut, though potential political influence may affect expectations for interest rates and bond market performance.
Deleveraging pressures in markets
Elevated repurchase rates above U.S. Federal Reserve's target range, combined with high market leverage, heighten the risk of deleveraging, with potential impacts on equities, credit markets, and volatile assets such as Bitcoin. While private credit provides some buffer, systemic vulnerabilities persist.
Equity vs. Credit risk in AI
AI investment requires substantial funding, presenting significant challenges. Equity markets can tolerate speculative excitement, but credit markets need evidence that projects are financially viable. Government support is likely, and in Australia, high interest rates and recent changes to how inflation is measured point to easing price pressures, making bonds more attractive and keeping credit spreads favourable.
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Jamieson Coote Bonds
Melbourne
Level 23, 101 Collins Street
Melbourne VIC 3000
T: +61 3 8580 0088
