Speaker · Updated
Leslie Falconio: latest market views
UBS Chief Investment Office
Summary
Leslie Falconio is a Managing Director and Head of Taxable Fixed Income Strategy for the Americas in the UBS Chief Investment Office, where she leads the firm's fixed income strategy and positioning views.
Chorus has 6 views from Leslie Falconio across 2 episodes on UBS On-Air since October 21, 2026.
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
UBS RCAO expects Fed hikes in December 2026 and March 2027, with cuts starting late 2027.
Falconio relays the UBS RCAO view on the Fed path. Hikes are expected in December 2026 and March 2027, followed by cuts starting near the end of 2027. She describes the market argument that pricing reflects the stronger inflation print, and that the market may be underestimating the amount of cuts needed later rather than the number of hikes.
“[From RCAO,] we do believe the Fed hikes in December. We believe the Fed hikes in March 2027. And then by the near the end of twenty seven, it starts to cut.”at 27:27
UBS On-Air: Fixed Income Conversation Corner with Lotfi Karoui (PIMCO) and Leslie Falconio (UBS CIO) ·
UBS underestimated 2026 US growth and the consumer, and expected Fed easing that didn't happen.
Falconio admits that UBS's economists underestimated 2026 growth. They had expected the Fed to ease, but the consumer proved stronger than expected. She says the Middle East conflict lasted longer than expected, and the market has had to recalibrate to a stronger economy and higher rates.
“we did underestimate growth in 2026. We did start the year anticipating that the Fed would ease, and we underestimated the consumer.”at 5:31
UBS On-Air: Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO) ·
Short-term yield moves matter less than carry; rapid rises can't be offset in short windows.
Falconio argues that media coverage of negative fixed income returns overstates the short-term damage. Investors focus on each 20 to 25 basis point move in yields, but the compounding income is the real driver of returns. The aggregate index was roughly flat in September even though prices fell, because the carry offset the losses. A rise of 30 basis points in two weeks is too fast for carry to offset.
“you're not giving enough time to earn the carry. That compounding income is a tailwind to return. ... going up 30 basis points in two weeks, you just don't have enough time to earn the carry.”at 9:42
UBS On-Air: Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO) ·
Market prices too many Fed hikes; UBS expects December and March hikes, then cuts from end-2027.
Falconio says the market's projection of the future Fed funds rate is too hawkish. Her base case is a December and March hike, followed by cuts starting at the end of 2027. This matches Rosner's view. She treats the path as a reason fixed income is attractive, since the market is pricing in more tightening than she expects.
“We believe the market's projections of future Fed fund rate is too hawkish. We think December, March hike and then as to your point, they start to cut at the end of twenty twenty seven.”at 13:47
UBS On-Air: Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO) ·
Equities are elevated on AI-driven wealth effects but UBS does not expect a near-term collapse and likes equities.
Falconio says the consumer has been the economy's driver through the wealth effect. That wealth effect comes from AI-related investment and capex that has pushed equity markets to elevated levels. She does not expect that to collapse soon, and she says UBS likes equities. Fixed income is also attractive now, but equities remain a core holding.
“not that we believe it's going to have collapsed anytime in near future because we don't, we actually like equity.”at 15:51
UBS On-Air: Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO) ·
Higher yields make fixed income a better equity diversifier than when yields were low.
Falconio says the higher yields go, the better the opportunity for fixed income to act as a diversifier. That role was hard to see when yields were much lower. Her point is that the higher yield now offers both income and a hedge against equity risk.
“the higher these yields get, the better the opportunity is to serve as that diversifier that was very difficult to see when yields are much lower.”at 16:04
UBS On-Air: Fixed Income Conversation Corner with Lindsay Rosner (GSAM) and Leslie Falconio (UBS CIO) ·
Shows
- UBS On-Air · 2 episodes
Ask your AI what Leslie Falconio thinks
Chorus gives Claude, ChatGPT and other assistants every view Leslie Falconio has shared on the shows it covers, next to everyone else's. Ask where they stand, what changed, and who disagrees.
Chorus reports what speakers said. It isn't investment advice.