Ariel Bezalel, bond investment manager at Jupiter Asset Management, and bond investment manager Harry Richards have shared their insights on the bond market outlook for 2025. The US economy has experienced a "hard landing" approximately 80% of the time in the past 120 years, with only about 20% of the time achieving a "soft landing". The market may be underestimating the possibility of an economic slowdown, which could prompt the Federal Reserve to cut interest rates by a significantly higher amount than currently priced in. Jupiter Asset Management states that with the 10-year US Treasury bond yield at around 4.5%, considering the future potential, this is an attractive option to hedge portfolio risks. Jupiter Asset Management points out that while the absolute level of the US unemployment rate remains relatively low compared to historical standards, the rate at which it is rising according to the SAM rule is concerning. According to the SAM recession indicator, an economic recession has begun when the three-month moving average of the national unemployment rate is 0.50 percentage points higher than the lowest three-month average of the past 12 months. Many market participants believe that part of the reason for the rise in the unemployment rate is labor force expansion, with immigration being one of the factors contributing to labor force expansion. They believe that as long as hiring remains strong, the increase in unemployment will not be a problem. However, a closer look at recent employment trends shows that there are still limited new positions being created after excluding government jobs, healthcare, and private education (which actually belong to non-cyclical industries). Current layoff situations are still limited, but once layoffs start to significantly increase, the opportunity to achieve a rare soft landing may have passed. It is also important to note that during past soft landing periods, such as the mid-1990s, employment in cyclical sectors grew strongly. The current environment seems to be different. US economy significantly differentiated, consumers feeling pressure US consumers are feeling pressure as continued price pressures from the COVID-19 pandemic are squeezing their ability to purchase non-essential items. This is particularly pronounced in the middle-income and low-income groups, with anecdotal evidence suggesting that consumers are becoming more cautious in their choices. Delinquency rates on credit cards and auto loans are continuing to rise. A few mega-corpora...Continued low economic growth. In addition, he also mentioned that any tax reduction measures will be supported by other sources of funding.Geopolitics is another area of keen interest for the Trump administration, with any resolution to the Russia-Ukraine conflict and Middle East conflicts likely to suppress oil and commodity prices, thereby easing inflationary pressures. Similarly, loosening environmental regulations could increase US oil drilling activity, helping to lower energy prices. The US and other developed market interest rates remain significantly high, with 10-year US Treasury bonds able to hedge risks. The key result of the above situation is that interest rates in the US and other developed markets are still substantially high and further policy easing is needed. The labor market is showing signs of instability, with a focus on data such as continued claims for unemployment benefits to look for evidence of sharp growth slowdown. In this environment, it is important to remember that the US economy has experienced a "hard landing" about 80% of the time in the past 120 years, with only about 20% of the time achieving a "soft landing". The market may be underestimating the possibility of an economic slowdown, which could prompt the Fed to cut rates significantly higher than the current pricing. Jupiter Asset Management suggests that, with the 10-year US Treasury bond yields around 4.5%, considering future conditions, this is an attractive option to hedge portfolio risks.