Notes 10-year yield dropped to ~4.0%, lowest levels since November, asks for thoughts.
Nicole
Michael Goosay
Recent sizable drop in long-term rates not unexpected, driven by expectations of Fed rate cuts amid mixed labor data, okay inflation trending toward 2%, and geopolitical risks.
Asks if bullish/optimistic about first half of 2026 and why.
Nicole
Michael Goosay
We think Fed will cut at least twice. Positive for fixed income, especially if labor market deteriorates further.
Asks for best plays to invest in fixed income at home.
Nicole
Michael Goosay
Focus on income via high yield, investment grade corporates, securitized credit. Fixed income also offers protection if economy weakens.
Asks about foreign bonds.
Nicole
Michael Goosay
Divergence in global central bank policy (BOJ, Australia hiking; BOE cutting). Weakening USD may allow attractive total return trades.
Asks about realistic wild cards.
Nicole
Michael Goosay
Emerging markets opportunity with dollar weakness, rising commodity prices. Biggest wild card is geopolitical risk.
Asks if people should put more into bonds than in the past.
Nicole
Michael Goosay
Income today is attractive; aging population needs more retirement income, so adding fixed income makes sense.