Alberto Gallo, co-founder of Andromeda Capital Management UK LLP, said that the credit market is showing signs of extreme complacency, and credit spreads are at historically low levels and fail to reflect potential risks. He warned that as risk is structurally shifting from stocks and physical assets to fixed income assets, bondholders are losing money, and this trend is being driven by a historic investment boom and a surge in government spending, and is accelerating. Gallo pointed out that US Treasury Secretary Scott Bessent faces an “impossible triangle”: it is necessary not only to control the yield curve, but not to cut the fiscal deficit, while maintaining a strong dollar. He warned that one of these three goals must require concessions, and the depreciation of the US dollar is most likely to be an outlet to release pressure. “Bezent was the captain, and the bondholder was a passenger aboard the Titanic. “When the iceberg hit the Titanic, the bondholders — that is, the passengers — didn't rush to the lifeboat because they didn't believe the Titanic would sink,” he said.

Alberto Gallo, co-founder of Andromeda Capital Management UK LLP, said that the credit market is showing signs of extreme complacency, and credit spreads are at historically low levels and fail to reflect potential risks. He warned that as risk is structurally shifting from stocks and physical assets to fixed income assets, bondholders are losing money, and this trend is being driven by a historic investment boom and a surge in government spending, and is accelerating. Gallo pointed out that US Treasury Secretary Scott Bessent faces an “impossible triangle”: it is necessary not only to control the yield curve, but not to cut the fiscal deficit, while maintaining a strong dollar. He warned that one of these three goals must require concessions, and the depreciation of the US dollar is most likely to be an outlet to release pressure. “Bezent was the captain, and the bondholder was a passenger aboard the Titanic. “When the iceberg hit the Titanic, the bondholders — that is, the passengers — didn't rush to the lifeboat because they didn't believe the Titanic would sink,” he said.