Corporate Bond Market Insight - How are the Fed and Investors Adjusting to AI?

Key takeaways from the latest edition:

In the wake of the Supreme Court ruling on IEEPA tariffs, the president announced a new, likely temporary, 15% global tariff. Estimates say that the government may need to refund nearly $300 billion in collected tariff revenue to corporations if lengthy challenges in court are successful.

The Fed is contending with artificial intelligence (AI) caused disruptions to employment, inflation and the economy, and it’s unclear if it will be successful easing into the new paradigm shift.

Core PCE rose unexpectedly at month end, solidifying concerns that progress toward the Fed’s inflation goal has stalled.

Credit spreads widened in February, and concerns around private credit specifically intensified with the equity prices of several large private credit funds declining.