Softening inflation, a resilient domestic growth picture, and shifting Federal Reserve rhetoric proved to be a powerful combination. Certain macro challenges such as significant looming U.S. Treasury issuance and ongoing conflict in the Middle East were all but ignored. Treasury yields collapsed as the correlation with risk assets remained positive. Spread product performed well. In corporate credit, lower-quality outperformed higher-quality. The agency MBS basis to Treasuries tightened. In short order, we “pulled forward” a lot of outperformance in risk assets that was expected to occur in 2024. Now, we enter the new year from a more challenging position of tighter spreads and fewer pockets of relative value. Market participants will continue to acutely monitor various measures of inflationary pressure, as any reacceleration of inflation presents a significant risk to the market in 2024.