finance AM market analysis — 2026-09-29
Financial markets are being pulled between two live risks rather than settling on one direction. Persistent inflation and fiscal pressure are keeping government bond yields elevated, a dynamic BlackRock’s Investment Institute links directly to the recent global bond sell-off, while BTRM notes that unresolved interest-rate and liquidity weaknesses from the 2023 US bank failures have not been fully resolved.
At the same time, weaker demand signals are shifting attention from funding stability to credit quality. American Banker reports that deposits have steadied and lending has gone flat, with the sector’s focus now on borrower resilience rather than liquidity. In the UK, the House of Commons Library notes that monetary policy remains restrictive because inflation is still running above target, limiting the scope for near-term easing. Taken together, the sourced evidence points to a market where higher-for-longer rates and slowing credit conditions are working against each other, with no clear resolution yet in the source pack.
Worth Tracking
- Long-term government bond yieldsFurther rises would pressure duration-sensitive assets and banks holding large unrealised securities losses, per BlackRock.
- UK inflation and rate guidanceInflation above target keeps policy restrictive, per the House of Commons Library.
- Bank credit quality and loan performanceAmerican Banker flags a shift toward monitoring borrower resilience as lending growth stalls.
This analysis was generated automatically and is for information only — not financial advice.