Public Fixed Income

Global Fixed Income: Themes to Watch in 2026

December 2025 – 7 min read

Tight spreads meet elevated all‑in yields as policy uncertainty, AI capex, and uneven growth set the stage. We see selective opportunities across High Yield, CLOs, IG Credit, and EM Debt—with 2026 shaping up as a year for rigorous credit picking.

2026 is shaping up to be a year defined by divergence: a corporate investment boom fueled by AI and infrastructure spending versus a labor market that has softened to levels not seen in a number of years; equity markets near historic highs even as parts of the consumer economy struggle; and a Federal Reserve navigating dissent on both sides of the policy spectrum.

Beneath the headlines, investors face a market where spreads are compressed across most sectors, yet all‑in yields remain historically attractive thanks to higher base rates. This combination—tight valuations but elevated income—demands nuance. It is not a beta market; it is a market for precision: security selection, curve positioning, and risk budgeting. Against this backdrop, we explore four key segments—high yield, collateralized loan obligations (CLOs), investment grade credit, and emerging markets (EM) debt—where opportunities exist, but success depends on separating durable signals from transient noise.

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Headshot of Adrienne Butler smiling at the camera.

Adrienne Butler

Head of Global CLOs
Headshot of Charles Sanford smiling at the camera.

Charles Sanford

Managing Director, Head of Global Investment Grade Credit
Headshot of Cem Karacadag smiling at the camera.

Cem Karacadag

Head of Global Sovereign Debt & Currencies Group
Headshot of Brian Pacheco smiling at the camera.

Brian Pacheco

Managing Director

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