UBS On-Air: Market Moves Fixed Income Conversation Corner Podcast with Leslie Falconio (UBS CIO) and Mike Contopoulos (Richard Bernstein Advisors)
Oct 30, 2025
Mike Contopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors, joins Leslie Falconio, Head of Taxable Fixed Income Strategy at UBS, to discuss fixed income market dynamics. They explore year-end performance expectations, the impact of a lower rate environment, and potential risks of spread widening. The conversation also covers why defensive duration strategies may be prudent now and the diverging trends in credit sentiment. They highlight agency MBS attractiveness compared to corporate credit and share thoughts on global positioning and cash flow impacts.
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Fixed Income Is Back As A Real Asset Class
- Fixed income has returned to being a real asset class with strong multi-year returns approaching equity-like levels.
- Mike Contopoulos highlights high single-digit potential from clipping coupon even without much further price appreciation.
Trim Duration, Don't Abandon It
- Anticipate cuts to cause near-term market repricing and possibly higher rates before they fall.
- Reduce duration modestly rather than eliminating it entirely to manage upside rate risk.
Cuts Can Paradoxically Push Yields Up
- Fed cuts can be followed by higher long-term rates if inflation remains hotter and labor stays resilient.
- Contopoulos likens a post-cut rise in yields to the September cycle when 10-year rates jumped after easing.