View: Short-term yields remain elevated amid mounting inflation concerns and expectations of more hawkish monetary policies. Long-end yields stay relatively anchored as investors see favorable value at current levels.

View: Carry conditions. MBS carry remains intact versus intermediate U.S. Treasuries. We prefer a barbell position consisting of lower 30-year coupons and production coupons, while avoiding the middle of the stack due to tighter valuations. We are maintaining our underweight in higher coupon premiums due to call risk concerns, and we continue to prefer specified pools over TBAs for better fundamental value and convexity.

View: Carry conditions. We expect spreads to remain range-bound or widen from historic tights, pressured by heavy new issuance, softening fundamentals, and steepening curves, particularly if macro volatility persists. Views for CMBS, RMBS, CLOs, and ABS reflect the tighter-than-average spread environment combined with weaker or normalizing underlying asset fundamentals. Senior securitized tranches offer attractive relative value versus other fixed income instruments. We remain focused on tranches at or near the top of capital structures, while being highly selective among more credit-sensitive positions as the downside risks outweigh the potential rewards. In private ABF, positive capital flows continue; we are targeting structures suited to perform through the cycle in residential, commercial, and prime consumer subsectors.

View: Carry conditions. Heavy AI-related issuance, private credit concerns, and geopolitical risk justify caution in the global IG corporate market. The degree to which spreads widen in the U.S. vs. Europe is dependent on the economic impact of higher energy prices. That stated, credit dispersion and high quality issuance provide opportunities to add risk selectively.

View: Carry conditions. Recent spread widening creates an attractive carry environment. Though cautious of prevailing macro risks, we remain constructive overall, maintaining our close-to-home defensive positioning in U.S. and European high yield bonds and loans, with a focus on potential relative-value opportunities borne from dispersion and dislocations. In direct lending, with expectations for low base rates now at risk, the playbook for late-cycle investing is greater selectivity and tighter terms.

View: Carry conditions. The conflict in Iran and the impact of the oil price and related shocks create uncertainty. Relative performance will reflect country-specific sensitivity to energy prices, monetary and fiscal policy, and a broader ability to absorb any growth or liquidity shock. Under a cautiously constructive base case for the sector, EM assets rebound while dispersion creates alpha-generating opportunities. The main risk comes from a more prolonged and expanded war.

View: Carry conditions. Tax-exempt munis have delivered on our Q4 rebound thesis, thanks to strong inflows and manageable supply. However, geopolitical events have introduced asymmetry in risk vs. reward. As a result, while we remain constructive on the market, we are focused on managing rate volatility in the event it emerges.