Good news, for a change

At mid-year 2009, Fitch’s “Fixed Income Forum” survey of senior fixed income professionals revealed a “gloomy but far less negative view” of economic conditions and even some optimism for a rebound in fundamentals in the next 12 months

Fitch’s survey was completed in June and shows that 23% of investors believe the U.S. recession will be “mild” going forward.

“Importantly, opinions in certain investment areas showed the most positive views in several years. Roughly two thirds of investors, for example, believe that fundamental credit conditions will improve in the investment grade corporate sector in the coming year, double the January share,” according to Fitch.

However, inflation is beginning to emerge as a concern. In the January survey, opinion was split on inflation being a future problem. In the new survey, 71% of investors placed inflation as the bigger threat.

Another threat mentioned was the government. In the June survey, investors were more concerned about government intervention than event risks such as the collapse of another financial institution.

Initiated in 2005, the bi-annual Fitch Ratings/Fixed Income Forum Survey provides insight into the opinions of professional money mangers regarding the state of the U.S credit markets. Responses were received from 131 senior investment personnel on their views of the economy, fundamental credit conditions across asset sectors and products, corporate strategies and other relevant topics.