FICC Focus Macro Matters: All Things Rates with BofA Strategist Swiber
Oct 2, 2025
Meghan Swiber, Senior U.S. rates strategist at Bank of America Securities, shares her insights on the shifting landscape of U.S. rates. She explores the potential move away from the federal funds rate as the policy target and highlights BofA's hawkish outlook amidst recent economic uncertainties. Swiber also delves into Treasury issuance strategies, discussing the implications for long-term rates and the tension surrounding the Federal Reserve's balance sheet. Her analysis offers a fresh perspective on how macroeconomic factors could influence future rate decisions.
AI Snips
Chapters
Transcript
Episode notes
Front-End Cuts Are Overpriced
- Bank of America expects only one more Fed cut by year-end and a pause in early 2026, making front-end rates stickier than markets price.
- That view favors micro flatteners and underweighting the very front end versus current crowded steepener bets.
Use Micro Flatteners Strategically
- Position underweight front-end duration and buy micro flatteners like April 2026 vs April 2027 to express higher near-term rates.
- Also consider two‑ten flatteners to benefit if the front end sells off and the curve compresses.
Crowded Steepener Risks
- The market is heavily concentrated in curve steepeners, creating crowding risk if front-end rates rise.
- A front-end sell-off would likely produce a bear flattening, the painful trade for current positioning.