Inflation, Rate Volatility, and the Floating Rate Advantage

The panel examines whether inflation is durably out of the box following the oil price shock and geopolitical tensions. Josy Mazzucchiello flags rising corporate price increases and the 2028 maturity wall as medium-term risks, while Jon Brager argues that fiscal deficits, threats to Fed independence, and deglobalisation mean rate volatility will be structurally higher going forward. Both speakers conclude that floating rate credit, and CLO AAAs in particular, represent an attractive way to earn yield while avoiding duration risk.