Tariffs an Opportunity to Go Long Fixed Income: BMO's Davis

The video discusses key financial topics for the upcoming year, focusing on tariffs, increased bond supply, and a Powell showdown. The main emphasis is on tariffs, which are seen as an opportunity to extend fixed income investments due to increased yields. The discussion includes strategies for investing in Treasuries, particularly in the 10-year range, and predictions for market movements in the first quarter of 2025, with a focus on real money accounts reallocating risk between fixed income and riskier assets.

Which of the following topics did the speaker spend the most time discussing with clients?

• Interest rates

• Powell showdown

• Tariffs

• Increased bond supply

What opportunity do tariffs currently provide according to the speaker?

• Shortening fixed income

• Investing in equities

• Going longer in fixed income

• Reducing credit exposure

In which part of the Treasury curve does the speaker feel adequately rewarded?

• 2-year yield

• 5-year yield

• 30-year yield

• 10-year yield

What is expected to happen in the first quarter according to the speaker?

• A significant rotation into fixed income

• An increase in riskier assets

• A decrease in fixed income allocation

• A stable market with no changes

What yield change does the speaker predict for the first quarter of 2025?

• From 4 1/2 to 4 3/4

• From 4 1/2 to 4 1/4

• From 4 1/2 to 4

• From 4 1/2 to 5