Important information
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All investing involves risk, including the risk of loss.
Past performance does not guarantee future results.
Investments cannot be made directly in an index.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
A basis point is one-hundredth of a percentage point.
Credit spread is the difference in yield between bonds of similar maturity but with different credit quality.
Duration is a measure of the sensitivity of the price (the value of principal) of a fixed income investment to a change in interest rates. Duration is expressed as a number of years.
Fixed income investments are subject to the credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.
The Federal Open Market Committee (FOMC) is a committee of the Federal Reserve Board that meets regularly to set monetary policy, including the interest rates that are charged to banks.
Hawkish describes a central bank or policymaker’s preference for a tighter monetary policy, typically to combat inflation.
High yield bonds, or junk bonds, involve a greater risk of default or price changes due to changes in the issuer’s credit quality. The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.
Inflation is the rate at which the general price level for goods and services is increasing.
A policy rate is the rate used by central banks to implement or signal their monetary policy stance.
Positive carry is an investing strategy that uses leverage to increase your returns.
Carry is the expected return from holding a bond, assuming its price remains stable. Bond income/yields are higher than the cost of financing.
Quantitative tightening (QT) is a monetary policy used by central banks to normalize balance sheets.
Spread represents the difference between two values or asset returns.
In general, stock values fluctuate, sometimes widely, in response to activities specific to the company as well as general market, economic, and political conditions.
Tightening monetary policy includes actions by a central bank to curb inflation.
The yield curve plots interest rates at a set point of time for bonds of equal credit quality but differing maturity dates in order to project future interest rate changes and economic activity.
The opinions referenced above are those of the author as of Nov. 21, 2025. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.
