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UST 10Y yield edged up 5bp to 4.18% amid Fed hawkish signals post-rate cut, with 2Y rising 2bp to ~3.6% as curve steepens 8bp weekly. IG corporates retreated alongside Treasuries, but HY gained 0.12% outperforming by 33bp on $1.2B inflows; spreads steady at 115-175bp IG, 291bp OAS HY. MBS and EM bonds dipped on duration pressure, while senior loans returned 0.27% best since July amid $5.8B supply. Muni yields unchanged with $736M inflows, $16.6B issuance, reinvestment cash exceeding $42B supporting bid.​

Curve steepening reflects stronger labor data and Fed pause hints, limiting 2026 cuts to one; 10Y-2Y spread nears 2022 highs signaling growth bets. Credit resilience persists on solid balance sheets, but elevated IG supply $600B yearly pressures spreads wider in recession risks. Year-end muni supply mutes amid holidays, favoring long-end 20Y at +112bp over 10Y premium.​

Outlook favors selective duration extension in munis, HY overweight for carry; watch payrolls/inflation for Fed path clarity, potential repo stress via Treasury buys. Risk-reward tilts tactical IG underweight, CLO/senior loan adds for floating-rate buffer as UST volatility persists near 4.2% ceiling.