These Are the Key Points of a Century of Economic Analysis in Mexico

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Análisis económico México 100 años
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The Economic Studies Department of Banamex celebrates 100 years of existence. It was at the end of March 1925 when the institution —founded 41 years earlier, in 1884— created its economic studies area and published its first journal, then called Estudio de la Situación Bancaria e Industrial. Four years later, it changed to its current name: Examen de la Situación Económica de México (ESEM).

“Resilience, perseverance, the desire and need to have accurate and reliable information, along with funding to consolidate it, are the factors that made 100 years of economic analysis and dissemination in the country possible through the ESEM and the Economic Studies Department of Banamex,” agreed the members of the panel held in celebration of the 100-year anniversary.

Participants included: Manuel Romo, CEO of Grupo Financiero Banamex; Alberto Gómez Alcalá, Director of Institutional Affairs, Economic Studies, and Communication at Banamex; Leonardo Lomelí, Rector of the Universidad Autónoma de México; Luis Anaya, specialist in Banking History; Julio Santaella, advisor to the Board of Governors of Banco de México; and Graciela Márquez, President of INEGI.

The century-old specialized area of Banamex and its journal are pioneers and unique in the country and, most likely, in Latin America.

In Mexico, there are only two journals and analysis areas that have existed for several decades (although not as many as Banamex’s). These are the Mercado de Valores journal, published by the development bank Nacional Financiera (Nafinsa), and the Comercio Exterior journal from the Banco Nacional de Comercio Exterior (Bancomext).

Until 1925, Banamex was the most important bank in a banking and financial system engulfed in the chaos following the end of the Mexican Revolution, which had left a divided society and a Mexican financial system without clear definitions on crucial issues such as the issuance of money or currency circulation.

To address this, in September of that year, the Banco de México (Banxico) began operations, with the intention of bringing order to the country’s monetary chaos, having the exclusive authority to issue money, among other things. The economic analysis area, founded just a few months after the launch of Banxico, was key to understanding the early process of establishing a central bank in a country like Mexico.

“Looking back from a century’s distance, we have an easier task today; our specialized area has been consolidated, and we have demonstrated its importance for our bank, for society, and for the country in general. Looking ahead, we have a very important task: to maintain the goal with which it was founded 100 years ago —to analyze Mexico, its economic problems and challenges, to propose solutions, and to uphold our objectivity, among other things,” concluded Sergio Kurczyn, Director of Economic Studies at Banamex.

Inverlink Adds Claudia Robledo in Miami as Managing Director North America

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Inverlink Claudia Robledo Miami
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The Colombian investment bank Inverlink has added Claudia Robledo to its team in Miami as Managing Director North America, according to an announcement the company made on its LinkedIn profile.

“It is with great enthusiasm that we welcome Claudia Robledo to our team as Managing Director North America, where she will bring her experience and leadership to strengthen our presence and impact within the real estate industry,” the firm said in its post on the professional social network. The bank aims to create a regional office to continue coverage in Latin America.

Robledo brings more than 25 years of international experience in the real estate sector in Europe, the United States, and Latin America, where she has held leadership positions at Macquarie Asset Management, CBRE, and Grupo Bancolombia, among other professional experiences. More recently, she has been independently structuring and advising investment strategies in the U.S. and Latin American markets.

According to Inverlink, Robledo structured and executed over $2 billion in transactions and has also developed new markets globally, serving on multiple boards of directors.

She holds a degree in Architecture from Pontificia Universidad Javeriana, an MBA, and a Master’s in Project Management from the Universidad Politécnica de Madrid, and she completed the PDD at IESE Business School.

Claudia’s strategic vision, market experience, and proven track record in asset management and acquisitions make her a valuable addition to our leadership team,” the Colombian bank said. “Her entrepreneurial mindset and ability to create value across markets perfectly align with our growth ambitions. We are confident she will drive continued success and strengthen our platform in North America,” it added.

State Street and Bridgewater Launch an ETF Based on the Strategies of Investment Guru Ray Dalio

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State Street Bridgewater ETF Ray Dalio
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Fans of Ray Dalio, founder of the hedge fund Bridgewater Associates, now have a new way to incorporate the investment guru’s strategies into their portfolios: State Street Global Advisors and Bridgewater Associates have launched the SPDR Bridgewater All Weather ETF (ALLW), a fund that brings the “all weather” strategy approach within reach of retail investors seeking resilience for their portfolios during market turbulence.

The strategy, which was developed by the hedge fund under Dalio’s leadership nearly 30 years ago, aims to provide exposure to different markets and asset classes to create a portfolio resilient to a wide range of market conditions and environments, according to the fund’s prospectus.

The portfolio allocates assets based on the fund’s view of cause-and-effect relationships, specifically how those asset classes react to changes in growth and inflation. State Street will buy and sell the fund’s investments, which may include a range of global asset classes, such as domestic and international equities, nominal and inflation-linked bonds, and commodity exposures.

The launch of the fund comes as markets face a phase of volatility due in part to concerns around tariffs and their effects on the economy and inflation. It also continues to expand State Street’s range of alternatives following the recent approval of the firm’s private credit ETF with Apollo Global Management.

This actively managed ETF has an expense ratio of 0.85% and invests based on a daily model portfolio provided by Bridgewater.

Private Capital and Liquidity? A New Approach you Should Know About

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Flex25 private capital and liquidity
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In recent years, private capital has taken center stage in institutional portfolios due to its risk-adjusted return potential and diversification benefits. However, its defining characteristic—illiquidity—can pose a challenge for both investors and portfolio managers. In this context, securitization emerges as an innovative and effective solution to transform illiquid assets into listed, liquid, and easily accessible securities.

This article of FlexFunds explains in a clear and practical way how securitization works in the context of private capital, what benefits it offers, and how it can be implemented.

Asset securitization is simply the process of transforming any type of financial asset into a tradable security. Through this financial technique, exchange-traded products (ETPs) are created to act as investment vehicles, with the aim of providing the underlying assets with greater liquidity, flexibility, and reach.

Traditionally, this process has been associated with the banking or mortgage sectors. However, an increasing number of private equity fund managers are exploring this approach to bring more flexibility to their portfolios, monetize assets without selling them directly, and attract a broader investor base.

Private equity funds are investment instruments designed to support the growth of non-listed companies. These vehicles are established through financial intermediaries who raise capital from investors and direct it toward various companies or projects with significant growth potential.

These funds typically have long investment horizons (8 to 10 years or more) and are closed-end structures, meaning that investors cannot enter or exit the fund during its lifespan. This can limit access for certain investors who require greater liquidity or face regulatory constraints.

Some of the most common types of private capital investments include:

Through securitization, it’s possible to pool interests in a private equity fund and issue securities that represent rights to the future cash flows of those assets. These securities can be structured in different risk and return tranches, making them adaptable to various investor profiles.

That said, implementing a securitization structure requires expertise in financial structuring, international regulation, and access to distribution platforms. This is where FlexFunds, a company specialized in creating efficient investment vehicles, can play a key role.

FlexFunds offers investment vehicles that enable private capital managers to:

1.- Increase liquidity: Securitization turns illiquid assets into listed products with ISIN codes, tradable through platforms such as Euroclear and Clearstream, and custodial in existing brokerage accounts.

2.- Diversify risk: By distributing the risks associated with the underlying assets among multiple investors, securitization helps reduce exposure for any individual investor—especially relevant in times of market volatility.

3.- Access international capital: Securitization facilitates access to international capital markets, allowing managers to attract investment from a global investor base.

4.- Protect the assets within the structure: Since the issuance is executed through a Special Purpose Vehicle (SPV), the underlying assets are isolated from any credit risk that may affect the manager and, therefore, the investor.

Like any financial tool, securitization comes with challenges that must be managed, including:

  • Accurate valuation of private assets
  • Transparency and disclosure to investors
  • Compliance with regulations across multiple jurisdictions

Securitization applied to private capital is a growing trend. It offers a viable solution to address the sector’s inherent illiquidity, expand the investor universe, and increase capital market distribution.

If you’re looking to expand the distribution of your private equity fund, securitization may be the tool that helps you reach a wider investor base. FlexFunds’ solutions can repackage this type of instrument in less than half the time and cost of any other alternative on the market.

For more information, please contact our experts at contact@flexfunds.com

First Day Without Currency Controls in Argentina: Dollar Rises, Stocks and Bonds Soar

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Argentina lifts currency controls
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The retail dollar closed at around 1,230 pesos per unit on Monday, April 14, marking the inaugural day of the new managed floating exchange rate regime announced by President Javier Milei’s administration on Friday, April 11, after nearly 14 years of currency controls in Argentina. The dollar’s rise represents a devaluation of approximately 12% compared to Friday’s closing rate.

Under the new regime, the greenback will fluctuate between 1,000 and 1,400 pesos per dollar, with a monthly band expansion of 1%. The market had been anticipating what the official exchange rate would be, after Friday’s close at 1,097 pesos.

Bonds and stocks responded with widespread gains on Wall Street. The Merval index rose by 4.5%. There was also some uncertainty, as many banks experienced website outages due to high demand for dollars.

Meanwhile, Argentina’s National Securities Commission (CNV), the capital markets regulator, lifted another restriction affecting individuals: the minimum 24-hour holding period. Until now, those who bought bonds in pesos to sell them for dollars in the MEP market were required to hold those securities for at least one business day before completing the operation. With the new regulation, that requirement is gone, streamlining transactions and making financial markets more accessible for individual investors.

CNV President Roberto Silva expressed support for the government’s economic direction: “We are proud to support President Javier Milei, Minister Luis Caputo, the Ministry of Economy team, and the Central Bank in implementing Phase 3 of the economic program for Argentina’s future.” He added that since the beginning of the current administration, the agency has been working to eliminate restrictions and regulatory obstacles, in line with the liberalization policy promoted by the executive branch.

Federico Furiase, a member of the Central Bank’s board, stated in a radio interview that the package announced last Friday with the IMF minimized the risks of lifting the so-called “currency clamp,” and emphasized that the exchange bands will move in opposite directions: the lower band, starting at 1,000 pesos, will decline by 1% monthly until reaching 888.36 pesos in a year, while the upper band will increase by 1% monthly—widening the spread in which the dollar will float freely, with the Central Bank intervening “at its discretion.”

On Monday, Argentine firm Max Capital used the phrase “Liberation Day”—the same one Donald Trump used when launching tariffs on the rest of the world—to describe this historic day for the South American country. “The Argentine government presented details of the new program with the IMF, kicking off a new phase of the stabilization plan as part of the transition toward a fully open capital account,” said a report signed by Alejo Costa, Head of Economics Research & Strategy at Max Capital. The report stressed that the fiscal anchor remains the main pillar.

The economic team lifted currency restrictions for individuals and corporate flows, although it maintained them for corporate portfolios (“stocks”), for which a new BOPREAL bond will be offered. The new official market will absorb flows that previously went through the CCL dollar (which involves buying and selling local sovereign bonds), eliminate the “blend” scheme used by exporters, and allow individuals to buy dollars.

Separately, U.S. Treasury Secretary Scott Bessent arrived in Argentina to meet with President Javier Milei in a show of support for the government. Reports indicate Bessent is accompanied by business leaders. His visit comes during U.S. negotiations with the rest of the world regarding the broad tariffs announced by Donald Trump on April 2.

Currency controls not only stifled investment in the country but also distorted the local macroeconomy.

The Argentine Association of Private, Entrepreneurial, and Seed Capital (ARCAP) voiced its support for the decision to move toward exchange rate unification. “This measure represents a significant step toward the country’s economic normalization and helps build a more predictable and stable environment, conditions necessary to stimulate productive development and improve investment prospects,” the group said in a statement.

“At ARCAP, we believe that when the right conditions are in place, private capital has the capacity and willingness to drive the country’s economic and social development through strategic investments that foster innovation, productivity, and job creation,” the statement concluded.

BlackRock Expands Its Range of Active ETFs With Two Enhanced Fixed Income Funds

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BlackRock active fixed income ETFs
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BlackRock Expands Its Range of Active iShares Enhanced ETFs With the Launch of Two Enhanced Fixed Income Funds: the iShares $ Corp Bond Enhanced Active UCITS ETF and the iShares € Corp Bond Enhanced Active UCITS ETF. Under the UCITS format, these vehicles offer investors access to “low-cost key asset allocation components that have consistent potential to generate alpha at the core of their portfolios.”

The asset manager explains that both strategies leverage the expertise of its systematic investment platform, with over $300 billion and 40 years of experience, to uncover the insights that drive future returns. The investment team’s process combines the power of big data and advanced technologies with human expertise to deliver predictable and repeatable alpha.

In the opinion of Jeffrey Rosenberg, Senior Portfolio Manager of Systematic Fixed Income at BlackRock, the current market environment has led investors to reconsider the role of fixed income in their portfolios to capture the attractive income opportunity we see today. “Our robust investment process allows us to identify and target bonds with attractive spreads to deliver more attractive risk-adjusted returns than investment-grade indices and active managers, while our quality selection approach helps to reduce downside risks,” says Rosenberg.

In this regard, the asset manager highlights that the new funds are designed to offer the most efficient use of the risk budget by taking hundreds of small evidence-based positions, in order to minimize unwanted risks (sector, duration) and achieve high information ratios. This disciplined approach can be used to complement existing core indexed strategies or to diversify investment styles in a volatile market context. Specifically, the enhanced fixed income investment methodology is based on a technology-driven process that analyzes more than 3,000 issuers daily, focusing on high-credit-quality companies trading at attractive valuations, with the goal of achieving superior total and risk-adjusted returns.

“Investors continue to turn to iShares in their search for innovative ETF solutions and can now access an efficient tool in both indexed and active strategies to achieve their financial objectives. Using active ETFs as core components of an active portfolio allows investors to allocate to proven sources of alpha over time to drive their asset allocation,” concludes Jane Sloan, Head of iShares and Global Product Solutions for EMEA at BlackRock.

Florida Ranks 21st in Housing Affordability; Key West Has the Most Expensive Properties in the State

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Florida housing affordability
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Out of the 50 states and the District of Columbia that make up the United States, Florida ranks 21st in housing affordability, taking into account both property prices and per capita income. On the other hand, North Port, Tampa, and Lakeland are among the metropolitan areas in the state of Florida that experienced some of the most significant price declines last January.

In 2024, 365,377 homes were sold in Florida, the highest number among all states in the country; the most expensive properties in the state are located in Key West.

The data comes from the market research study “The Least and Most Affordable U.S. States to Buy a Home” by the website TradingPedia, based on median home sale prices between January and December 2024 from real estate broker Redfin. TradingPedia correlated these prices with third-quarter 2024 per capita personal income data from the country’s Bureau of Economic Analysis.

In 2024, property prices in the United States continued to soar to record highs, driven by inflation and sustained demand from prospective buyers and investors. Median property prices are nearly six times higher than average annual incomes, and on top of this, mortgages remained expensive despite three interest rate cuts introduced by the Federal Reserve in recent months.

According to the report, the median home price in the United States reached $428,201 last year, while per capita income stood at $72,741 in the third quarter. This means that the average home costs about six times a person’s annual income.

Michael Fisher of TradingPedia states that “even with the housing affordability crisis plaguing the U.S. real estate market, certain states offer relatively accessible housing alternatives if we look at home prices in relation to personal income.”

Far From the American Dream of Homeownership

Although Californians have to deal with the highest median home sale price in the country ($819,983), Hawaiians face even worse affordability levels, according to the report. Residents of the Aloha State have an average annual income of $70,082, which accounts for just 9.09% of the median home price ($771,350). As a result, homebuyers would have to set aside more than 11 years of income if they choose to buy a home with cash.

At the other end, the cheapest properties per square foot are found in the state of Mississippi, followed by Louisiana, Indiana, Kansas, and West Virginia.

With a per capita personal income of $70,581 (the 22nd highest in the country) and a median home price of $411,658, Florida has a property price-to-income ratio of 5.83. This makes it the 21st most affordable state to buy a home. In 2024, 365,377 homes were sold in the state, the highest number among all states in the country. Per capita sales are also the highest, with 15.6 sales per 1,000 residents.

The per capita personal income in the state of Florida is $70,581, which is approximately 17.15% of the state’s median home price ($411,658). Within Florida, the places where prices fell the most in January 2025 were North Port (9.66% lower than in January 2024), Tampa (4.05% lower), and Lakeland (3.13% lower).

Focusing on the 31 metropolitan areas in Florida listed by Redfin, the research found that the most expensive homes in the state are located in Key West. The median home price there in January was $1,075,000, a decline of 11.16% compared to the same month in 2024. However, only 96 homes were sold there during the month. The most popular real estate markets, on the other hand, are Tampa (median price of $355,000; 3,468 homes sold in January 2025) and Orlando ($400,000; 2,329 homes sold in January 2025).

Based on median home prices and annual incomes, Iowa emerges as the most affordable housing market in the U.S. The median sale price of all residential properties rose slightly from 2023 to $234,708, the lowest rate in the country.

These are the most expensive metropolitan areas in Florida, according to the median home sale price in January 2025:

Key West ($1,075,000), 96 homes sold
Naples ($699,608), 626 homes sold
Miami ($560,000), 1,439 homes sold
West Palm Beach ($520,000), 1,501 homes sold
Fort Lauderdale ($460,000), 1,574 homes sold
Crestview ($440,000), 441 homes sold
North Port ($423,000), 1,505 homes sold
Orlando ($400,000), 2,329 homes sold
Port St. Lucie ($385,000), 579 homes sold
Cape Coral ($385,000), 1,113 homes sold

To access the full TradingPedia report, click here.

The SEC Highlights the Role of Investors in Capital Formation and in Driving the U.S. Economy

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SEC highlights investors' role
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The Office of Investor Education and Advocacy (OIEA) of the U.S. Securities and Exchange Commission announced that, as part of April’s National Financial Literacy Month, it will highlight the key role that investing plays both in driving the U.S. economy and in preparing American investors for their own financial future.

“Investing is an important tool for individuals and families to achieve their financial goals, such as affording higher education, supporting retirement, or simply building wealth for the future,” the SEC said in a statement. “While building their own financial futures, investors also play a key role in driving the innovation-based U.S. economy by providing capital to businesses of all sizes,” it added.

Financial Literacy Month offers an opportunity to highlight the importance of saving and investing for the future. “From stocks, bonds, and funds to the latest market products, investment ultimately contributes to the overall economy of our country,” stated the current Acting Chair of the SEC, Mark T. Uyeda. “All investors have the opportunity to achieve their personal financial goals while playing a role in capital formation, which makes our economy so dynamic,” he added.

Throughout April, the SEC’s regional and headquarters staff will encourage investors to take advantage of free saving and investing tools and resources available at Investor.gov. The OIEA’s newsletter “Ten Investment Tips for the 2025 Investor” offers investors information on how to avoid investment scams, the importance of diversification, how to be an informed investor, and more.

“Whether you’re new to investing or an experienced investor, Investor.gov has resources that can help you build wealth for a strong financial future,” said Lori Schock, Director of the SEC’s OIEA. “Starting early and creating a diversified long-term savings and investment plan that takes into account your risk tolerance can help you accumulate wealth to live the life you want,” she added.

The SEC’s outreach events in April include financial literacy activities for teachers and high school and college students; webinars and events that provide investor education and information on fraud prevention for older investors; and presentations to service members focused on building wealth, avoiding scams, and discussing the benefits of tax-advantaged retirement plans such as the Thrift Savings Plan.

From Reacting to Headlines to Possible Tariff Negotiations: Caution Reaches Investment Portfolios

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Tariff negotiations impact investment portfolios

The week began in a frenzy. After a day of widespread declines in global stock markets, as well as in commodities and fixed income, and significant movements in major currencies—especially Latin American ones—the Fed called an extraordinary closed-door meeting. In addition, U.S. President Donald Trump threatened China with an additional 50% tax if it did not withdraw its 34% retaliatory tariffs, while the European Union offered Trump 0% tariffs on industrial products.

Volatility, declines, and uncertainty mixed all in one day—but calm has returned. Today, the sun has risen again and the word most often heard is “negotiation.” “Today’s session opens with optimism given the conciliatory tone of U.S. authorities toward the Land of the Rising Sun. In Europe, Monday’s Trade Ministers Summit resulted in a lukewarm response of intentions and proposals to negotiate with the United States. Meanwhile, China, aware that it is the main economic rival, remains firm in its stance to increase tariffs on U.S. products by 34% starting April 10, despite U.S. threats,” explain analysts at Banca March in their daily report.

According to experts, all attention is now focused on the countries’ ability to negotiate to limit the impact of tariffs. “Negotiations on trade agreements could be complicated and include retaliation and additional tariffs, but will ultimately culminate in agreements with lower trade barriers than those announced last week,” says David Kohl, Chief Economist at Julius Baer. In the opinion of Aline Goupil-Raguénès, strategist at Ostrum AM (Natixis IM), “it is unlikely that these tariffs will be reduced quickly, as Donald Trump seems determined to keep them high long enough to encourage foreign investors to invest in the United States.”

Trump, Tariffs, and the Fed

Andy Chorlton, CIO of Fixed Income at M&G Investments, reminds us that the major unknown of the tariff policy is its impact on inflation, which directly affects the Fed. According to Chorlton, the best example is in the Fed Chair’s comments at the beginning of April, when he stated that he considered the inflation impact of any tariff increase to be transitory—a temporary spike in prices. “Just a few days later, on Friday, he acknowledged that the impact of tariffs on both inflation and employment is uncertain and that he is taking a wait-and-see approach. With so much uncertainty about the final outlook for tariffs, the Fed’s determination to fight any rise in inflation expectations is clear. It’s worth remembering that its commonly known ‘dual mandate’ refers to employment and inflation, not to market stability or stock market rises. Nonetheless, investors clearly feel that the risk to growth is such that this mandate could be tested, and the market now expects five rate cuts by the Fed in 2025,” adds the expert from M&G.

What to Do With Portfolios

The latest weekly market commentary from the BlackRock Investment Institute notes that risk assets will face greater pressure in the short term given the significant escalation of global trade tensions. Therefore, the asset manager has shortened its tactical horizon and reduced risk-taking. “The sharp increase in global trade tensions and the extreme uncertainty surrounding trade policy have triggered widespread sell-offs of risk assets. It is unclear whether the uncertainty will cloud the outlook temporarily or for longer, so we chose to reduce our tactical horizon to three months. This means giving more weight to our initial view that risk assets could come under greater pressure in the short term. For now, we are reducing equity exposure and allocating more to short-term U.S. Treasury debt, which could benefit from investors’ desire to seek shelter amid volatility,” BlackRock notes.

According to Michael Walsh, Solutions Strategist at T. Rowe Price, from a multi-asset perspective, making significant asset allocation changes during periods of intense market turbulence leaves the portfolio exposed to missing improvements in investor sentiment. “The market may respond positively to any news related to resolving the current trade uncertainty. While we remain cautious and have moved away from U.S. equities in particular in recent weeks, we have maintained risk levels close to benchmarks within our multi-asset portfolios. As markets attempt to reassess this heightened level of uncertainty, we seek potential opportunities amid the dislocation,” says Walsh.

He explains that they remain cautious, as the rise in political uncertainty affects global growth, which has so far been solid, and reverses inflation trends. “As always, holding cash during times of turbulence provides liquidity to take advantage of market opportunities amid volatility. Cash interest rates are declining but remain attractive, and we have increased our holdings since the beginning of the year, mainly at the expense of another major defensive asset, high-quality government bonds. Tariffs and other trade barriers could push prices higher, which would drive up yields on fixed income instruments as we move closer to 2025. Where we hold government debt, our bias has leaned toward inflation-linked securities,” adds the strategist at T. Rowe Price.

In fixed income, Banca March reaffirms its view: “Last week we felt it was important to shed any overexposure to longer-duration bonds in the United States after our target of a 4% yield on the 10-year U.S. Treasury was reached.” Meanwhile, the fixed income teams at M&G have been concerned for months that credit spreads had priced in too much optimism, leaving little room for negative surprises, with spreads around the most expensive levels seen since the global financial crisis.

“This optimistic view also spread to government debt markets, where almost no possibility of a slowdown was priced in, and as a result, we considered they offered attractive valuations. In short, the market was fairly complacent, so the starting point of this correction certainly contributed to the size of the moves seen in just a few days. Our value-based fixed income investment approach allowed us to position our strategies defensively heading into Liberation Day, putting us in a good position to face these volatile times,” argues Chorlton.

Vanguard argues that fixed income ETFs can be a good cushion for portfolios in these times of uncertainty. “In this environment, marked by episodes of volatility and the prospect of market downturns, broad diversified exposure to fixed income is one of the most effective tools for investors to insulate their portfolios and mitigate losses. Global bonds with currency hedging, in particular, can be a good example,” argues Joao Saraiva, Senior Investment Analyst at Vanguard Europe.

A Calm Look at What Happened

Monday’s session was marked by very high volatility in both equities and fixed income, with the VIX—the S&P 500’s implied volatility indicator—at levels not seen since COVID-19. “In this environment, markets moved based on headlines. A rumor about a potential 90-day delay in implementing tariffs caused an intraday rally of 7% in the S&P 500, worth $2.5 trillion, which evaporated in just over 15 minutes after the rumor was officially denied. Beyond the volatility, open talks with Japan helped curb the sudden setbacks that marked the start of the session, even allowing the Nasdaq to close in positive territory,” summarize analysts at Banca March.

A key point was the Fed’s emergency meeting, which put on the table the option of intervention. “In this regard, short-term rate futures indicate that the U.S. central bank will cut official rates four times this year. In our view, this reaction seems unlikely, as the Fed will not be able to take such an active role in the face of inflation that could exceed 4%, due to the tariff effect,” add the experts at the Spanish firm.

According to the MFS Market Insights team, global markets had not experienced a level of stress and volatility like this since the early days of the pandemic in 2020. “Government bond yields have dropped significantly, reflecting strong demand for safe-haven assets. U.S. 10-year Treasury yields are now around 4%, after falling about 20 basis points since April 2. Similarly, 10-year German bund yields have fallen by the same margin. Meanwhile, credit markets have begun to show signs of stress, particularly in high-yield spreads, which have widened about 85 basis points in the U.S. and 60 in Europe since last Wednesday. In currency markets, the Japanese yen and the Swiss franc have performed better in recent days, thanks to their defensive nature. Finally, in commodities, oil prices have suffered a significant correction, falling to low $60 levels due to their vulnerability to a global risk aversion shock,” summarize analysts at MFS IM.

Another striking aspect in recent days is that, as noted by Bloomberg, more and more billionaires are breaking ranks with President Donald Trump—or at least with his tariff policy. “Ken Griffin, better known outside the financial world as the man who paid $45 million for a dinosaur, stated that the latest tariffs are a ‘huge policy mistake’ and amount to a heavy tax on American families. And Larry Fink, CEO of BlackRock, was equally direct, saying that most business leaders assure him that the U.S. is already in a recession,” they mention as key examples.

Stablecoins or a Risky Business: The SEC Is Concerned About How Investors Access Them

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SEC concerns about stablecoins
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The SEC’s Division of Corporation Finance is publishing a series of releases dedicated to jurisdictional exemptions for the crypto space. Although the Trump Administration seems more willing to support this growing universe, the literature published by the SEC maintains that certain so-called “stablecoins” are not securities. For Caroline A. Crenshaw, Commissioner of the U.S. regulator, the most striking part of this statement is not so much its final conclusion, but the analysis the staff relies on to reach it. “The legal and factual errors in the statement present a distorted view of the market for U.S. dollar-pegged stablecoins, drastically underestimating their risks,” she says.

As she explains, much of the staff’s analysis is based on the actions of issuers who supposedly stabilize the price, guarantee redemption capability, and generally reduce risk. SEC experts acknowledge, albeit briefly, that some dollar stablecoins are only available to retail buyers through an intermediary and not directly from the issuer. In reality, they acknowledge that it is common—not the exception—for these coins to be available to the retail public only through intermediaries who sell them on the secondary market, such as cryptocurrency trading platforms.

Specifically, more than 90% of stablecoins in circulation are distributed in this way. “Holders of these coins can only redeem them through the intermediary. If the intermediary cannot or will not redeem the stablecoin, the holder has no contractual recourse against the issuer. The role of intermediaries—particularly unregistered trading platforms—as primary distributors of dollar-backed stablecoins poses a series of additional significant risks that the staff does not consider,” says Crenshaw.

Consequences for the Investor

In the Commissioner’s opinion, people are not thoroughly analyzing the consequences of this market structure or how it affects risk, and she argues that the fact that intermediaries handle most of the distribution and redemption of retail dollar stablecoins significantly diminishes the value of the issuer actions on which the staff relies as “risk-reducing features.”

“One of these key features is the issuer’s reserve of assets, which the staff describes as designed to fully meet its redemption obligations—that is, to have enough assets to pay $1 for every coin in circulation. But, as mentioned, issuers generally have no redemption obligations to retail coin holders. These holders have no interest in or right to access the issuer’s reserve. If they redeem coins through an intermediary, the payment comes from the intermediary, not from the issuer’s reserve. The intermediary is not obligated to redeem a coin for $1 and will pay the holder the market price. Therefore, retail holders do not have, as the staff claims, a right to dollar-for-dollar redemption,” she argues.

On the other hand, she considers it inaccurate for the staff to suggest that just because an issuer’s reserve is valued at some point above the face value of its coins in circulation, the issuer has sufficient reserves to meet unlimited redemption requests (whether from intermediaries or holders) in the future.

“The staff also exaggerates the value of the issuer’s reserves as collateral by claiming that some issuers publish reports, called proof-of-reserves, showing that a stablecoin is backed by sufficient reserves. As the SEC and PCAOB have warned, proof-of-reserves reports do not prove such a thing,” she adds.

The SEC’s Conclusion

For the Commissioner, these legal and factual errors in the staff’s statement severely harm holders of dollar stablecoins and, given the central role of these coins in crypto markets, also harm crypto investors in general. Moreover, she highlights that they feed into a dangerous industry narrative about the supposed stability and safety of these products.

“This is especially evident with the staff’s choice to repeat a highly misleading marketing term: digital dollar, to describe U.S. dollar stablecoins. Make no mistake: there is nothing equivalent between the U.S. dollar and privately issued, unregulated, opaque (even clearly opaque to the staff itself), uncollateralized, uninsured cryptoassets loaded with risk at every stage of their multi-level distribution chain. They are a risky business,” she argues.

What Is Happening in Other Parts of the World?

Interestingly, in Latin America, interest in stablecoins has grown over recent years as a tool against inflation—as seen in countries like Argentina and Venezuela—as well as an alternative for facilitating international transactions (Mexico being a prime example) and promoting financial inclusion.

In terms of regulation, the situation varies widely by region. However, Brazil stands out, where a significant increase in stablecoin use has been observed, accounting for around 90% of cryptoasset transactions in the country. According to experts, this growth has led authorities to consider specific regulations to address challenges related to oversight and enforcement.

Across the Atlantic, the European Central Bank (ECB) continues its efforts to ensure that the digital euro meets the Eurosystem’s objectives and aligns with legislative developments within the European Union. In this regard, two major steps were taken last year. First, the ECB published its first progress report on the preparation phase of the digital euro. It highlighted the design of high privacy standards so that digital payments, both online and offline, closely resemble cash transactions. In addition, work began on a methodology to calibrate holding limits for the digital euro.

Second, in December 2024, the ECB published its second progress report, covering progress made between May and October 2024. During this period, the Regulation Development Group completed a review of the initial draft regulation, addressing approximately 2,500 comments. Furthermore, seven new working groups were launched focusing on critical areas such as minimum user experience standards, risk management, and implementation specifications.