Outlook Summary for 2011 3
Rates and Curve Overview 4
Forecast of Total Fixed-Income Supply 9
Forecast of Total Fixed-Income Demand 14
Inflation: A Year of Normalization 20
Swap Spreads: Spread Curve Likely to Further Invert 25
Volatility: Steepening in Expiries 28
Agency MBS: From Public to Private Hands 31
Agency Debt: Issuance Continues to Dwindle 33
Balance Sheet Unlimited, Or: Why We Stopped Worrying
About Deflation 39
Systemic Risk from Euro Peripherals 44
Financial Reform: Inverted Spread Curve, Higher Vols 46
Swap Spreads: Structural Changes 51
Model Portfolio: Year in Review 54
Appendix A-1 56