UBS On-Air: Market Moves Top of the Morning: Fixed Income Strategist - Pushing the boundaries
Sep 19, 2025
Leslie Falconio, Head of Taxable Fixed Income Strategy Americas at UBS, shares insights on the fixed income landscape. He discusses expectations for Fed rate cuts and how they may influence market dynamics. Leslie highlights the strong performance of investment-grade securities and agency mortgage-backed securities, offering positioning strategies for the coming months. His views on the yield-curve steepener thesis and buy-the-dip guidance provide valuable context for investors navigating this sector.
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Steepening Is A Longer-Term Trend
- Leslie sees recent curve flattening as a temporary hiccup inside a longer-term steepening trend.
- She expects steepening to resume over the next several months as growth slows but avoids recession.
Avoid Extending Into Long End
- Avoid extending duration into the long end because long yields underperformed and intermediate maturities offered better trade-offs.
- Stay concentrated in the intermediate part of the curve rather than extending into long maturities.
High Quality Gained From Carry And Demand
- Investment grade and other high-quality sectors outperformed because yields offered attractive carry while spreads compressed.
- High-quality allocations let investors lock in income and avoid taking extra credit risk during slower growth.