Fixed Income Strategic Forum: An Erosion of Trust in an Era of National Policy Musts?

Our first Strategic Forum of 2025 provided an opportunity to pause, take a breath, and reflect on the recent volatile markets and economies. This forum, grounded in deep research and robust debate, centered on the fact that we are encountering significant change in global priorities and perhaps the global world order. This shift toward national interests is accompanied by, or indeed requires, a similarly meaningful shift toward a fiscal-led era. However, for many major economies, the starting fiscal position is already challenged, raising concerns of debt sustainability, exacerbated by a high cost of capital and lingering inflation fears. If these critical themes were not enough for markets to grapple with, the heavy-handed execution has also stirred an erosion of trust that, in turn, raises the risk of a reallocation to, or at least reevaluation of, unconscious, overweight positions in US markets. What happens when a policy of musts risks being trumped by an erosion of trust?

For investment professional and institutional investor use only. Not for use with the public.

Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is an integrated asset manager across public and private markets offering a diverse range of capabilities, including real assets, real estate, credit, equities and multi-asset solutions.

Other than Macquarie Bank Limited ABN 46 008 583 542 (“Macquarie Bank”), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.

The information in this document is not, and should not be construed as, an advertisement, an invitation, an offer, a solicitation of an offer or a recommendation to participate in any investment strategy or take any other action, including to buy or sell any product or security or offer any banking or financial service or facility in any jurisdiction where it would be unlawful to do so. This document has been prepared without taking into account any person's objectives, financial situation or needs. Recipients should not construe the contents of this document as financial, investment or other advice. It should not be relied on in making any investment decision.

[4654278] 7/2025
© 2025 Macquarie Group Limited