Twas Two Weeks Before Christmas 2025

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Twas two weeks before Christmas, when all through Ray Jay’s house,
A 43-day record government shutdown, now data to rouse;
The stocks were purchased with enthusiasm and flair,
In the hopes that growth and great wealth they could snare;

Investors were nestled comfy on corporate creds,
While visions of transparency were facts of the Fed’s;
And Powell, sitting duck, takes no crap;
He was settled at leaving office a respected chap,

When out in the market, pausing rate cuts was the chatter,
I sprang from my desk to see what was the matter,
Employment numbers - monthly they fell with a splash,
Yet inflation was sticky, creating a clash.

Fed mandate to keep pricing status quo,
Gave a lustre of uncertainty, Fed direction we don’t know,
When, what to my wondering eyes we see such a year,
But did we just prolong the recessionary fear,

The Magnificent seven were the stocks to pick,
Paired with individual bonds, portfolios got slick.
More income, duration the name of the game,
Extension swaps, a market opportunity to proclaim.

“Now Robert Redford! now Pope Francis! now Dick Cheney! now George Foreman!
On James Lovell! on Jane Goodall! on Georgio Armani! And Gene Hackman,
To the top of their class! They all stood tall!
Now dash away! Dash away! Dash away all!”

As expansionary periods help consumers to buy,
Enlarging debt with deficits may soon make them cry.
The government and Fed, so much to do,
With a sleigh full of issues, they must see it through -

And then in a twinkling, I look for some proof,
Will AI technology create or take jobs in a poof?
As I drew in my head, the possibilities abound, 
Down the chimney, corporate commitment all round.

Political by-partisan infiltrates from head to foot,
The turmoil tarnishing reputation and maybe GDP output;
A bundle of trouble, we’ve flung so much smack,
Can we sideline the hatred to get back on track?

Worldwide – Ukraine, Israel, Sudan, Haiti! It’s super hairy! 
Now, China’s assertion in Taiwan is getting a bit scary!
Affordable healthcare and immigration center row,
Political polarization is our terrible foe. 

Trump, Jinping, Zelenskyy, Netanyahu, Macron – forces beneath,
As the smoke, the trouble encircles like a wreath;
Accountable duty, keeping peace and news from getting smelly,
We pray their actions show good news on our tele.

Yields stay chubby and plump creating wealth,
Individual bonds dual benefit comes in stealth.
Preserving capital their primary thread,
Adding to income just as we said;

The curve’s steepened a welcome perk,
Making the intermediate to long, the place to lurk,
Rebalance investment allocation as wealth grows,
Locking yield for longer one of our portfolio pros.

We spring from our desks, to avoid financial gristle,
Fixed Income Solutions responds with the speed of a missle.
Our mission is to help clients shine like winter snow white,

But most importantly remember,

“Merry Christmas to all, and to all a good night!”

The author of this material is a Trader in the Fixed Income Department of Raymond James & Associates (RJA), and is not an Analyst. Any opinions expressed may differ from opinions expressed by other departments of RJA, including our Equity Research Department, and are subject to change without notice. The data and information contained herein was obtained from sources considered to be reliable, but RJA does not guarantee its accuracy and/or completeness. Neither the information nor any opinions expressed constitute a solicitation for the purchase or sale of any security referred to herein. This material may include analysis of sectors, securities and/or derivatives that RJA may have positions, long or short, held proprietarily. RJA or its affiliates may execute transactions which may not be consistent with the report’s conclusions. RJA may also have performed investment banking services for the issuers of such securities. Investors should discuss the risks inherent in bonds with their Raymond James Financial Advisor. Risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration. Past performance is no assurance of future results.

Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.

To learn more about the risks and rewards of investing in fixed income, access the Financial Industry Regulatory Authority’s website at finra.org/investors/learn-to-invest/types-investments/bonds and the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access System (EMMA) at emma.msrb.org.