Vishy Tirupattur, Chief Fixed Income Strategist at Morgan Stanley, shares insights on how upcoming policy changes may impact the market. The biggest change is expected to come from deregulation, particularly regarding the Basel III Endgame. This move is likely to unleash significant capital in U.S. banks, which will boost lending, increase purchases of securities—especially Asian CMBS and CLO AAAs—along with fueling stock buybacks, dividends, and a revival in mergers and acquisitions. These developments are set to benefit the broader credit market and highlight various investment opportunities, particularly in securitized products. While tariff adjustments and tax cuts are also on the horizon, their effects are expected to unfold more slowly and gradually.
