The recent market volatility has made equity market valuations more attractive. Still, the equally-weighted S&P 500 Index continues to look more attractive than the capitalization-weighted index. We expect the U.S., propelled by innovation and relatively strong fundamentals, to continue leading global equity markets. We remain focused on companies with consistent earnings due to continuing economic risks. At current interest rates, high quality fixed income looks very attractive while high yield is less attractive on a risk-reward basis. Our allocations are positioned to generate attractive current yield while protecting against large interest rate moves and the risk of credit deterioration. We expect the Federal Reserve to slowly reduce short-term interest rates further later this year. We are finding attractive opportunities to lock in current income levels in the belly of the yield curve through investment grade fixed income instruments while long-term interest rates do not adequately compensate investors for the associated risks.

The recent market volatility has made equity market valuations more attractive. Still, the equally-weighted S&P 500 Index continues to look more attractive than the capitalization-weighted index. We expect the U.S., propelled by innovation and relatively strong fundamentals, to continue to lead global equity markets. The value style and quality are poised to benefit from a market rotation. At current interest rates, high quality fixed income looks very attractive while high yield is less attractive on a risk-reward basis. Our allocations are positioned to generate attractive current yield while protecting against large interest rate moves and the risk of credit deterioration. We expect the Federal Reserve to slowly reduce short-term interest rates further later this year. We are finding attractive opportunities to lock in current income levels in the belly of the yield curve through investment grade fixed income instruments while long-term interest rates do not adequately compensate investors for the associated risks.

The U.S. housing market has been a critical factor in the broader economic landscape, and its trends have profound implications for families, investors, and policymakers alike. While there has been a growing concern about a potential housing crisis, current conditions do not suggest an imminent national housing bust. That said, there are several risks to monitor, which include regional disparities, affordability challenges, and the long-term effects of past market distortions. In the near term, we are unlikely to see a housing bust. However, the market will need to reconcile the conflicting pressures of rapid price appreciation, rising construction costs, higher interest rates, and a persistent housing shortage. This process will take time, and the market may experience price stabilization or corrections along the way. Yet, for the foreseeable future, the risks to the housing market appear manageable, provided that policymakers and industry stakeholders continue to address the underlying structural challenges facing the sector.