The fixed income (FI) portfolios of institutional investors are evolving rapidly. Investment strategists around the globe are noting that, in the search for yield, many investors are...see more on our partner's site

JPMorgan Chase & Co. is the latest financial firm to sell debt in the U.S. Bond Market, joining the likes of Goldman Sachs, Bank of America and Citigroup Inc.. JPMorgan is selling over $3 billion in bonds with a yield of .97 percentage points over the U.S. Treasuries and 11 year maturity. The flood in financial bonds is a result of the strong earnings posted by the financial industry in the last quarter. Goldman leads the pack with over $9 Billion in new debt issuance. However, some say JPMorgan is the most susceptible to issuance pressure from regulators with debt issuance driving leverage.

FINSUM: Don’t let balance sheet risk get anyone worried, because post 2008 leverage ratios are closely monitored and almost ensure fiscal support pending financial risk.

Goldman Sachs has a new financial product that is giving its investors a chance to bet on special purpose acquisition vehicle performance. The new product acts as a two-year bond that plays out according to SPAC performance, and gives institutional investors an income option with SPAC exposure. Goldman will take a portion of the SPAC stock itself as opposed to a fee, and will offer the option for investors to lever-up on the SPAC as well. Some are concerned about Goldman’s relationship because they are also financers and advisors of SPACs themselves, potentially posing a conflict of interest.

FiNSUM: This is one of many new products that can replace income investors’ missing-link in their portfolio, and with rates at ultra lows it’s a nice alternative to dividend stocks.

Credit rating agency Moody’s Investor Service, has issued a warning to investors that the debt poses ‘systematic risk’. The factors that Moody’s sees sourcing that risk is an opaque market, eroding lending standards and liquidity concerns. Private credit has seen a flood of inflows this year to venture capital, private equity, real estate and infrastructure as the industry is more robust to the pressures from the mainstream economy on traditional bonds and equity. However, the risks in the medium sized boutique bond market are hard to capture because they fall in regulatory limbo and could cause broader economic disruption. Finally private equity relies heavily on leverage and while that's fine for the time being, it may pose serious structural issues for the illiquid market as interest rates begin to normalize.

FINSUM: The 2008 financial crisis was primarily driven by the rise of the lesser regulated shadow banking industry. Private credit’s swell is very reminiscent of the housing bubble creation.

Headline inflation, which includes food and energy prices, rose at a staggering 4.4% annual growth at the end of September, which is the highest number posted since 1991. This isn’t necessarily the Fed’s preferred inflation metric because food and energy prices are more volatile than other areas, but even excluding those categories core inflation was at 3.1%. On top of that, personal income is down almost 1%, which makes that inflation gain even more painful. Policy makers are worried about overall economic health as stagflation becomes a real possibility with GDP coming in at just 2%, the weakest quarter since the recovery started. Treasury Secretary Yellen says that yearly inflation will remain high but she expects monthly inflation to come down as the year closes, with headline figures coming down towards the target of 2%. On the positive side, wages and salaries kept up this month, hitting 4.6% but that still poses challenges for the labor market in its own way.

FINSUM: Inflation is still posting strong gains but keep your eyes on the monthly annualized numbers to gauge if what Yellen says is accurate.