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<v 0>I'm Jenipher Nevin, and I'm joined today by Brian Carney.</v>

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Thank you for being here. Now,

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the Federal Reserve has been in the news quite a bit lately.

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What's Canso's opinion on this?

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<v 1>Jen, in the old days,</v>

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all you had to do if you wanted to understand Federal Reserve policy was read

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the meeting minutes. These days,

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you have to be aware of the political pressure that's being placed on the

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Fed. And the president has been a vocal critic of the

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current chairman, Mr. Powell.

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And the president would like to see lower interest rates to

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stimulate higher economic growth and presumably a much higher stock market.

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And on Friday,

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the president nominated Stephen Moore to the Board of Governors

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of the Fed. And if Mr. Moore is confirmed,

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he is likely to be a vocal proponent of the president's agenda,

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which ultimately will mean lower interest rates and higher inflation.

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<v 0>So is politics influencing policy, and why would that be important?</v>

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<v 1>The short answer is possibly. Let's talk about what we know.</v>

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We know the U.S. economy is moderating;

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it expanded 2.6% in the latest quarter.

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We also know the Fed has said they're not going to raise interest rates in

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2019,

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and we also believe they're willing to tolerate higher levels of inflation

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than they have in years past. What does that all mean to us?

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It means potentially higher interest rates,

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most notably in the long end of the yield curve.

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<v 0>Now, let's shift gears a little bit.</v>

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What is Canso's opinion on the leveraged loan market?

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<v 1>So, Jen,</v>

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we've been amazed over the last several years at the indiscriminate buying in

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the leveraged loan market,

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and what that buying has done has eroded covenant protections

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for lenders and driven pricing significantly tighter. So, in short,

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it's been a great time to be a borrower in the leveraged loan market and not a

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great time to be a lender.

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<v 0>Well, thank you for your insights, Brian. For more information,</v>

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go to the Canso Funds website and read our latest edition of the Corporate Bond

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Newsletter.