On January 30th, Schroders Global Investment Unconstrained Fixed Income Investment Team stated that although the risk of an "hard landing" in the economy has not completely disappeared, the prospect of inflation has improved significantly and financial conditions have eased (making the financial situations of consumers and businesses easier). In addition, there are signs that key leading indicators (such as bank loans) are stabilizing, prompting the bank to lower the possibility of an economic hard landing. Schroders Global Investment pointed out that there is nothing that reflects the change of the times better than inflation, especially when the pace of price increases continues to slow down. Core inflation indicators in the United States and the Eurozone (based on a 6-month annualized basis) are currently hovering around the 2% target level. In addition, key driving factors such as wage growth in the U.S. are declining, and leading indicators such as the resignation rate are making financial markets more optimistic about further slowdown in inflation. These factors have led policymakers to shift their focus from tightening monetary policy to adopting a more relaxed policy. Among central banks around the world, the change in stance by the Federal Reserve is most evident. Since the tightening cycle in 2022, the median of the dot plot for the end of 2024 (reflecting the median of Federal Open Market Committee (FOMC) members' forecasts of future interest rates) has decreased for the first time compared to previous forecasts, making it a key moment. In this context, trading strategies that make use of a steeper yield curve (such as trading short-term bonds outperforming long-term bonds) remain the bank's preferred way of investing in interest rates. In terms of asset allocation, the bank prefers high-quality credit and maintains a very positive view on securitized credit, mortgage bonds, and agency mortgage-backed securities. In addition, the bank is more optimistic about European investment-grade credit as the valuation of U.S. investment-grade credit is not attractive. In the foreign exchange market, entering 2024, the bank is bearish on the U.S. dollar due to expectations of global manufacturing cycle improvements, while raising its views on some cyclical currencies such as emerging market currencies, the pound, and the euro.