UBS On-Air: Market Moves Fixed Income Conversation Corner with Scott DiMaggio (AllianceBernstein) and Leslie Falconio (UBS CIO)
Aug 15, 2025
Leslie Falconio, Head of Taxable Fixed Income Strategy Americas at UBS, and Scott DiMaggio, Head of Fixed Income at AllianceBernstein, dive deep into the evolving fixed income landscape. They discuss the impact of recent economic data on the U.S. economy and anticipate Federal Reserve interest rate cuts. The duo analyzes the complexities of employment data and its effects on market volatility. They also highlight investment opportunities in high yield and emerging markets, emphasizing the need for adaptive strategies in a shifting environment.
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Clarity Narrowed Market Outcomes
- Early-year policy and tariff uncertainty narrowed as details on tariffs and fiscal plans emerged, reducing outcome range for markets.
- That clarity encouraged investors to buy credit and duration as risk environment looked more certain.
Position For Gradual Fed Cuts
- Expect the Fed to move gradually with a series of cuts rather than large single moves.
- Position portfolios for consecutive, smaller rate reductions toward a neutral rate near 3%.
Cuts Can Steepen The Curve
- Rate cuts tend to steepen the yield curve with long rates falling less than intermediate rates.
- A 50bp cut could trigger a bond market rally and curve steepening, especially in longer maturities.