Explains his discretionarily managed fixed income index structure (duration, credit, securitization) and its goal to outperform the Bloomberg Aggregate. Highlights that active fixed income management works because managers can avoid overleveraged 'problem children' that are the biggest weightings.

Details current index positioning: underweight duration, bulleted portfolio (overweight 3-7yr sector) as a bet on yield curve steepening, underweight credit (an equity bet), neutral on mortgages, with conviction positions in short-term TIPS (expecting inflation problem) and dollar index forwards (expecting dollar rebound in 2026).

States the US 10-year yield was the ONLY developed market long-term yield to fall in 2025 (down 40bps). Every other 10-year and all 30-year yields were unchanged or higher. This is the thesis of 'The US Stood Alone'.

Argues the cause was NOT growth, inflation, or supply. US nominal GDP (5.4%) is above the 10-year yield (4.12%), suggesting no economic pull for lower rates. US real GDP growth is faster than 2/3 of the developed world.

Notes US core inflation is higher than over half the developed world and above the Fed's 2% target. The post-COVID inflation regime is structurally higher (~4.2% avg) vs. post-financial crisis (~1.7%). Current 2.7% is elevated, not 'problem solved'.

Highlights the massive federal deficit (5.28-5.82% of GDP), which is larger than peak recession levels and comparable only to wartime/crisis periods. This spending is inflationary and should push yields up, not down.

Identifies the unique feature: President Trump has based his presidency on a falling 10-year yield, pressuring the Treasury and Fed. Markets expect Fed cuts in 2026 because Trump, a 'real estate guy,' wants rates at 1% and will appoint a compliant Fed chair.

Forecast: Does not think the 10-year will be an outlier again in 2026. Expects sticky inflation, strong economy, and continued deficit spending to push rates HIGHER. If the Fed cuts against this backdrop, market rejection could push yields even higher.

Argues weak labor market data may be misinterpreted due to potential negative population growth from immigration policies. The appropriate payroll breakeven could be ~11k jobs.

Concludes you shouldn't fear rising yields in fixed income if you manage for it (like his index does). The risk is buying bonds expecting a recession and rate collapse that doesn't happen.