Global Fixed Income: Themes to Watch in 2026
Tight spreads meet elevated all‑in yields as policy uncertainty, AI capex, and uneven growth set the stage. We see selective opportunities across High Yield, CLOs, IG Credit, and EM Debt—with 2026 shaping up as a year for rigorous credit picking.
2026 is shaping up to be a year defined by divergence: a corporate investment boom fueled by AI and infrastructure spending versus a labor market that has softened to levels not seen in a number of years; equity markets near historic highs even as parts of the consumer economy struggle; and a Federal Reserve navigating dissent on both sides of the policy spectrum.
Beneath the headlines, investors face a market where spreads are compressed across most sectors, yet all‑in yields remain historically attractive thanks to higher base rates. This combination—tight valuations but elevated income—demands nuance. It is not a beta market; it is a market for precision: security selection, curve positioning, and risk budgeting. Against this backdrop, we explore four key segments—high yield, collateralized loan obligations (CLOs), investment grade credit, and emerging markets (EM) debt—where opportunities exist, but success depends on separating durable signals from transient noise.
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