I mean, this has been a generational period, I mean, historic. When you think about what's happened in fixed income, you had a dynamic where the Fed was too easy for too long and then all of a sudden had to move so quickly to get rates to these extraordinary levels, hundreds of basis points. Listen, the next few months, we're going to get to a place where the Fed is going to pause. And then you're going to be able to capture yields in the markets that we haven't seen in literally decades. Very exciting. Not just nominal interest rates but real rates.
We've been living through this period of excess, if you think about it, over 8% year on year inflation. I mean, for years, economies were trying to develop markets. You're trying to create 1%, 2% in Europe, 1% in the US, 2% Japan, anything. Now all of a sudden, you're getting 8%. We've got to bring that down.
Now, you're going to see something play out over the next few months that you're seeing now. Economy slows. That excessive inflation is going to come down. Freight costs are coming down. Shipping costs are coming down. Inventories for companies, for retailers that are rising, bringing costs down.
So inflation is coming down. I don't think there's any question inflation's coming down. It's going to come down on a level that's higher than we're used to and then probably stay there for a bit of time.
So the beauty of fixed income and how it's changed over the last few years, it used to be you had one decision to make. Are you going to buy the credit markets? Or are you going to buy a similar singular decision? Are you going to buy interest rate product? And now all of a sudden, you've had a market that has grown in terms of types of issuance.
And the pressure you've seen on markets around the world has made it that the regime shift, the idea shift. And you've got to get underneath the surface, understand the research, understand, gosh, there's a secular move taking place in the developed markets or emerging markets. Credit. You want to be high quality versus low quality. We saw in this year three to four regimes in a year. That takes years to play out.
My sense is that volatility will continue. And alongside of that, the opportunity set becomes robust. So this is a pretty exciting time to be in fixed income. And I think for the next few years, you're going to have an opportunity to really pick up some product at attractive levels, build real income in your portfolio.
