In this episode of Masters in Business, Barry Ritholtz interviews Steve Laipply, Global Co-Head of Bond ETFs at BlackRock, discussing the bond and ETF markets, the Fed's influence, and investor behavior in fixed income. Laipply recounts his career path, from initially considering medicine to finding his passion in finance and fixed income, and shares his experiences at Bank of America Merrill Lynch and BlackRock. The conversation explores the complexities of hedging fixed income risks, the optionality in mortgage prepayments and callable debt, and the efficiency of bond ETFs. Laipply predicts significant growth in bond ETFs, driven by their resilience during market stresses like the 2008 financial crisis and the COVID-19 pandemic. They also discuss active versus passive fixed income investing, the challenges of active management, and the current state of bond market volatility, touching on the impact of tariffs and fiscal policy on inflation and bond yields.
