Key Updates in This Quarter's Forecasts

Relative to Q3 2025, our long-term outlook for fixed income assets is mixed, with sovereigns somewhat higher and lower-quality credits somewhat lower as a continuing rally in risk assets tightened credit spreads:

• US Aggregate Bonds: Revised to 4.6% from 4.5% last quarter.
• US Long Treasury Bonds: Revised to 5.2% from 5.0% last quarter.
• US High Yield Bonds: Revised to 4.3% from 4.4% last quarter.

Our 10-year forecasts for equity markets declined across regions as last quarter’s 7.7% gain in global equities weighed on valuations:

• US Large-Cap Equities: Revised to 5.3% from 5.8% last quarter.   
• International Equities ex-US: Revised to 7.1% from 7.3% last quarter.   
• Emerging Markets Equities: Revised to 8.1% from 8.4% last quarter.   

Portfolio rebalancing recommendations were limited this quarter.