Market is confused because of tremendous uncertainty - waiting to see next political move, oil prices, inflation, earnings, and what it means for Fed action.

Investors are sitting on their hands. The VIX should probably be higher given the uncertainty.

Haven't changed positioning contours - still tilted cyclical, international markets, emerging markets ex-China, Japan, Europe, US industrials/energy/materials. Raised cash to 7% (from 2%) as buffer against uncertainty.

Macro signals haven't rolled over yet - estimate revisions, forward-looking indicators, employment haven't plummeted. If conflict resolves, January/February landscape re-emerges.

We were saying zero or one cut when market expected 2-3. Now see probability of hike. Fed shouldn't cut into inflationary environment heading toward 4%.

If Fed cuts aggressively, bond vigilantes would push 10-year yields well north of 5%, causing higher rates that ultimately slow growth and punish markets.

Danger lies in funds that sold vehicles as somewhat liquid. Could see contagion where investors sell what they can in public markets to raise liquidity.

Prefers to stay on sidelines in corporate private credit, though infrastructure/hard-asset credit may have opportunities. Leveraged loan segment has excess.