Bill Eigen, chief investment officer of absolute return fixed income at JPMorgan Asset Management, isn’t ready to say markets are in the clear just yet.
Despite recent signs of stabilization, he says there’s too much uncertainty to let your guard down.
Volatility Is Still in Play
“Income is math at the end of the day,” Eigen told CNBC’s Squawk Box.
“And what you saw in mid-April, particularly April 9, 15, 16, and 21, really certain segments of the fixed income markets really got hurt.”
Among the hardest hit were convertible bonds, especially those tied to semiconductor stocks.
High-yield credit also briefly spiked, touching 10% all-in yields. That was enough for Eigen to start putting some money to work, but he says those opportunities vanished quickly.
“By the 21st, everything pretty much bottomed and started moving away,” he said.
While he did deploy some capital, he still describes his overall portfolio as defensively positioned.
Jobs Data? Secondary Now
With volatility this high, Eigen says macroeconomic data like the jobs report barely registers anymore.
“We’re one Truth Social post away from being up or down 5% every day,” he said. “The data’s almost secondary at this point.”
He expects the May jobs number to disappoint. As a small business owner himself, he says there’s too much uncertainty to justify hiring, even though his companies are doing relatively well.
U.S. Credit Looks Like Greece
What really concerns Eigen is the growing fiscal strain in the U.S. Credit default swaps on U.S. debt are now priced about the same as Greece, he pointed out.
“That tells you what people think of the creditworthiness right now of the U.S.,” he said.
With $2 trillion-plus deficits, rising defense spending, growing interest payments, and tax cuts on the way, Eigen says there’s no clear path to fiscal improvement. “You can’t cut entitlements, so how’s the deficit going to get any better?” he asked.
He also believes foreign holders of U.S. Treasurys — like Japan and China — are taking note.
“Maybe we need to divest.”
Where the Money Is Going Instead
That growing mistrust in U.S. debt may be one reason why gold and silver prices are surging, and copper is holding near highs.
That isn’t great news for inflation, Eigen warns, especially as he sees rising input costs in his own businesses.
In terms of strategy, Eigen is happy to sit in cash for now, earning nearly 4.5% while waiting for better opportunities.
Frustration With Both Sides
Eigen also criticized the lack of serious policy discussion in Washington.
“Instead of focusing on Medicaid reform or even food stamps, things that are out of control. Yeah, we’re going to take on the drug companies,” he said.
He pushed back on proposals for higher top tax rates and a millionaire’s tax.
“I just want things that are good for everyone,” he said. “A lot of policies on both sides aren’t good for everyone.”
For now, he’s keeping dry powder ready. “When volatility hits like that… I love it. I’m sitting on liquidity.”
And while April may have offered some brief opportunities, he’s not betting the worst is behind us.
“We’ve all been lulled into thinking, oh yeah, that’s over.” He warns it could easily happen again, and investors shouldn’t assume the turbulence is behind us.