Recently, the Schroders Global Unconstrained Fixed Income Investment Team stated in a report that recent economic data suggest that Trump's election as President of the United States has sparked the so-called "animal instinct," increasing the possibility of an "unstoppable" economic situation. In this scenario, inflation remains sticky, and interest rates may need to stay at higher levels for a longer period of time. The probability of an "unstoppable" economic situation has been raised to 35%. This comes at the cost of an economic "hard landing," in which economic activity would sharply decline, and further interest rate cuts would be necessary, with the current probability of this scenario at only 5%. In the short term, there are very limited reasons to worry about the outlook for the US economy. While these scenarios apply globally, the US currently has strong economic momentum, which means that local developments have a significant impact on the probabilities of different scenarios. As we approach 2025, more evidence indicates that US businesses or confident in the new government, so economic data may remain strong. It is worth noting that confidence among small businesses has further increased, manufacturing activity continues to expand, and the latest job openings in the US suggest that businesses are more confident about the medium-term economic outlook. With robust economic growth and improving market confidence in the outlook, there are signs that the US economic environment may become a bit too strong. There has been a downward trend in the local unemployment rate in December 2024. This is crucial for the Federal Reserve, as it has slightly raised its forecast for the unemployment rate in 2025. At this stage, there is no need for the Federal Reserve to react suddenly, especially considering that wage pressures seem to be easing and price pressures are still relatively under control. However, there is reason to remain vigilant, as the higher probability of an "unstoppable" economic scenario reflects these risks. Another reason to believe that the US economy will continue to grow in the coming months is that since the COVID-19 pandemic, economic data in the first quarter of each year tends to show a seasonal strong momentum. Therefore, despite positive revisions in economic data, there is still a possibility of upward revisions to the general expectations for US economic growth in 2025. While in recent weeks the investment markets have significantly shifted towards fully digesting the possibility of an "unstoppable" economic scenario, the higher probability of this scenario prompts the team to remain cautious about long-term bonds. Maintaining a neutral stance is still appropriate, especially considering the strengthening momentum of the US economy, increasing employment, and limited progress in deflation. However, Schroders Global still believes that in the coming months, the yield curve may steepen further, especially in the US. While the front end of the curve may still be primarily influenced by the federal funds rate, if there are signs of economic downturn in the US, expectations for short-term rates may decrease, creating an attractive asymmetric phenomenon. On the longer end of the curve, the increase in term premia has kept yields under pressure in recent weeks, but Schroders Global still sees room for further development in this situation, especially considering the historically low starting point. In terms of fixed income allocation, Schroders Global still prefers US agency mortgage-backed securities (MBS) due to their attractive valuations, despite rising sovereign bond yields, this asset class remains relatively good. In terms of corporate credit, the team prefers short-term European investment-grade credit, which seems to offer relatively more value. More broadly, Schroders Global still believes that high yield bonds are unattractive at current valuations, but compared to the US market, European high yield bonds have higher marginal value. Like in December 2024, mortgage-backed securities remain relatively popular, with their valuations being more attractive compared to investment-grade credit and international agency, sovereign, and government agency (SSA) bonds.