US Fixed Income Strategy: The US Fixed Income Weekly

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US Fixed Income Strategy: The US Fixed Income Weekly

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US Fixed Income Strategy

The US Fixed Income Weekly

Economics – Trim your enthusiasm 11 May 2026

Three drawbacks of trimmed mean PCE: signal depends on trim, it lags turning points, Fixed Income Strategy

and a switch could hurt Fed credibility. Fed speak was hawkish. Some non-voters wanted United States

two-sided guidance; others argued AI doesn't give the Fed room to cut. We expect April Cross Product

CPI to continue to show the effects of the Iran war.

Fixed Income Research

US Rates – Fed pricing in the balance BofAS

We hold our tactical 2y short; April jobs are the near‑term catalyst, risks are skewed to Chris Flanagan FI/MBS/CLO Strategist

the upside, with a beat likely to drive a larger market reaction than a miss. Despite BofAS

oil‑shock history arguing against hikes, 6m OIS has lagged average selloff on 50% oil +1christopher.flanagan@bofa.com646 855 6119

spikes; this leaves the front end exposed if labor strength persists. Mark Cabana, CFA

Securitized Products – Some run it hot: good for spreads, RatesBofASStrategist

+1 646 743 7013

mark.cabana@bofa.comnot good for duration

1Q26 nominal GDP growth of 6% = the 50-year average but is above the 10-year (5.5%) Neha Khoda

Credit Strategist

and 20-year (4.4%) averages. Trump Administration likely to run economy even hotter BofAS

and look for AI deflation to eventually mitigate inflation. Strong nominal growth should +1 646 855 9656 neha.khoda@bofa.com

be supportive of credit and securitized spread tightening but unfavorable for duration.

Alvin Fung

Investment Grade Credit – Position for less supply in 2H ABSBofASStrategist

+1 646 855-9091

The heavy IG corporate supply so far in 2026 has certainly left a mark. We argued the alvin.fung@bofa.com