2025 Summer Leadership Series – Treasury Volatility and Fed Uncertainty Define Market Outlook 

In the seventh installment of Connect Money’s 2025 Leadership Series, industry experts weighed how sharp swings in the U.S. 10-year Treasury yield are reshaping financing and investment strategies. The debate centered on the Fed’s next move, with some warning that a rate cut too soon could reignite inflation, while others flagged the risks of no cut at all. Panelists also pointed to signs of excess optimism, particularly in segments of the equity market showing froth. 

Keep reading for insights from Garett Bjorkman, CEO, PEG; John Swift, Managing Director, Head of Wealth Management, Rockfleet Financial Services Inc.; Mike Hurley, Chief Market Strategist, NexPoint; Michael Underhill, Founder and CIO, Capital Innovations; Stacy Chitty, Co-founder & Owner, Blue Vault Partners; and Jake Heidkamp, Principal, Co-President, FactRight. 

The current volatility in the U.S. 10-year Treasury yield is reshaping decision-making. Are you rethinking financing strategies, possibly delaying investments or seeking alternative funding sources?  Are you lengthening, staying short, or hedging rates more actively given the Fed’s uncertain path?   

Garett Bjorkman, CEO, PEG: Volatility in long-duration rates has definitely sharpened our focus on capital structure. While we anticipate easing at the short end of the curve, long-term yields are facing structural upward pressure. That’s why we tailor our financing approach to the business plan of each asset. For shorter-term strategies, we may utilize floating-rate debt with selective hedging to protect against tail risk. For longer-hold assets with stable cash flow, we’re taking advantage of fixed-rate opportunities while they remain attractively priced.  

Garett Bjorkman

We are not in a holding pattern. We are active, disciplined, and constantly evaluating the most effective tools to reinforce the return profile of every investment we make. 

John Swift

John Swift, Managing Director, Head of Wealth Management, Rockfleet Financial Services Inc.: Treasury yield volatility reflects deeper structural uncertainties around fiscal policy trajectory, global capital flows, and persistent inflation dynamics. Rather than becoming paralyzed by this uncertainty, we favor strategies that remain duration-aware while maintaining strategic flexibility.  

In our advisory work, we’re seeing a pronounced shift toward hybrid capital structures—particularly within private markets—where investors can negotiate terms that adapt across different interest rate regimes. This approach acknowledges that rate forecasting has become increasingly unreliable while ensuring portfolio resilience across scenarios.  

On the municipal bond side, we favor intermediate duration positioning with active curve management, looking for opportunities like tactical barbell exposures to address reinvestment risk while capturing relative value. Our approach has become more surgical—less dependent on macro timing calls, more focused on managing path dependency risks.  

For wealth management clients, the key insight is that flexibility has become more valuable than conviction in rate positioning. Portfolios that can adapt to regime changes will outperform those built around specific rate forecasts.   

What would be the single biggest market surprise from the Fed this year? A cut too soon, or no cut at all?   

Mike Hurley, Chief Market Strategist, NexPoint: Based on the current status of the Fed Funds Futures contracts, no cut at all. At the time of my response, the markets are expecting two, 25 bps cuts by year end, with the first coming at the FOMC’s September meeting. 

Mike Hurley

Michael Underhill

Michael Underhill, Founder and CIO, Capital Innovations: Biggest surprise? A cut too early. That’s a credibility risk. It would signal a panic pivot — and markets could reprice risk across the curve and across the globe. On the flip side, no cut at all could validate our inflation-linked exposure and real asset overweight. Either way, the Fed’s posture is the fulcrum. 

Are there areas of the market where you see signs of excess optimism, positioning, or froth?   

Stacy Chitty, Co-founder & Owner, Blue Vault Partners: While there are just too many variables in the market to be overly optimistic, I think there’s reason for optimism. Things look particularly good in certain sectors. Contributors to the Blue Vault 2025 Alternative Investments Mid-Year Outlook and Select Sector Reports — our annual pulse-check on the state of the alts industry — highlighted private real estate, private credit, and infrastructure investing as reasons for optimism. 

Stacy Chitty

A key theme in the report is that fundamentals for private real estate remain strong and appear to be supporting a rebound in the net-lease, travel and lodging, and other sectors. Some say private real estate is poised for a long bull run. Our own research shows that while quarterly fundraising for publicly offered nontraded REITs are still far off their 2021 peak, the industry reported a second consecutive increase in inflows in the first quarter of this year. As for credit and infrastructure, investing in AI-generating data centers is the hot topic of the moment. We’ll just have to see how optimism in that sector plays out! 

Jake Heidkamp

Jake Heidkamp, Principal, Co-President, FactRight: As a research firm that focused on illiquid/non-traded investments the continued buoyancy and multiple expansion (specifically cyclical price to earnings ratios) across the magnificent 7 and broader S&P 500. On a more specific note, EBITDA multiple expansion on private equity companies has been notable as has the trend to continuation funds to migrate earlier portfolio investments, this gives us some hesitation in long-term risk/reward profiles in the sector.  

That said several of the lower middle market/micro market portfolio companies we follow have had tremendous revenue and earnings growth which we find more encouraging as a foundation for investor returns. 

Please visit the Insider page for our latest 2025 Summer Leadership series articles.   

Important Disclosures: Views expressed represent opinions of John Swift, Managing Director at Rockfleet Financial Services, Inc., are subject to change, and for educational purposes only. Rockfleet Financial Services, Inc. does not provide legal or tax advice; consult appropriate advisors. Municipal bonds involve risks including possible loss of principal, interest rate sensitivity, and liquidity challenges. Income may be subject to federal, state, local taxes, and AMT. Information on municipal securities is available at emma.msrb.org. Rockfleet Financial Services, Inc. may receive compensation for municipal securities transactions, creating potential conflicts. Past performance does not guarantee future results.