Where to watch for risks and opportunities in bond market as Warsh era at Fed begins

• Watch the 10-year Treasury yield; historically, crossing 4.5% has caused stocks to 'wobble'.
• The strength of the US economy is driving rate cut expectations down and rate hikes onto the table.
• Focus on building macro-proof portfolios and diversifying away from 'Mag 7' stocks towards other sectors and emerging markets.
• The high-yield fixed income market exhibits strong credit quality and sound fundamentals, making it resilient despite equity volatility.

The discussion focuses on risks and opportunities in the bond market amidst a strong US economy and potential Fed policy shifts. John Davi highlights the 10-year Treasury yield as a key risk indicator and advises building macro-proof portfolios, diversifying beyond the 'Mag 7' into other sectors and emerging markets. JoAnne Bianco notes the high-yield market's strong credit quality and sound fundamentals, explaining its resilience.