Listen on The Move
EPISODE SUMMARY
With oil prices surging, rate-cut expectations evaporating, and a conflict now entering its fourth week, host Pierre Daillie sits down with Jeffrey Sherman, Deputy CIO of DoubleLine Capital, to interrogate the assumptions underlying today's risk portfolios. Sherman maps the transmission channels from Middle East conflict to Main Street purchasing power, dissects what the bond market is — and isn't — signalling about fiscal sustainability, and raises uncomfortable questions about the liquidity architecture of private credit vehicles that investors may not have asked themselves yet. The conversation spans the K-shaped labour market, the rotation into international and emerging market assets, and where Sherman sees the most defensible risk-adjusted opportunities in fixed income right now — without pretending the answers are simple.
3 KEY TAKEAWAYS
• The Iran conflict is structurally different from a tariff shock — war policy does not reverse on equity market pressure, making the "buy-every-dip" playbook potentially dangerous for the first time in years.
• Semi-liquid private credit vehicles carry a hidden contagion risk: when investors can't redeem, they sell public assets instead — a dynamic Sherman calls "the margin vortex" — and that forced selling can spiral back to reprice the illiquid positions that started the problem.
• In this environment, Sherman favours short-duration high-quality credit, agency and non-agency mortgages, and emerging market local currency bonds as the preferred expression of the de-dollarisation and commodity tailwind trade.
TIMESTAMPED CHAPTERS
00:00 - Opening — overweight US risk and what to do about it
01:30 - Introduction: recording amid active conflict, March 20, 2026
03:15 - War as an inflationary event — oil, distillates, and the infrastructure damage timeline
06:00 - Higher oil for longer: the "transitory" shock that stays at the new price level
08:00 - Growth curtailment, the deficit, and what the bond market is actually pricing
11:25 - Why this is not a TACO trade — the limits of policy reversal in wartime
13:50 - K-shaped economy: labour market confusion, the no-fire/no-hire dynamic, and wage data
19:35 - Three regressive shocks hitting lower-income households: inflation, tariffs, oil
20:10 - Credit spreads: IG, high yield, and the triple-C divergence
23:30 - International equities, the commodity rotation, gold, and EM local currency bonds
30:15 - DoubleLine's portfolio positioning and the case for diversification right now
34:20 - Private credit: the slow motion train wreck, gating mechanisms, and the margin vortex
45:40 - The liquidity mismatch problem — why "semi-liquid" is a contradiction in terms
49:05 - Specific fixed income opportunities: mortgages, CLOs, IG, and leveraged loan avoidance
52:45 - Practical playbook for advisors: portfolio tilts, hedges, and what to explicitly avoid
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