Victory Income Investors’ 2026 Mid-Year Outlook

Victory Income Investors’ Fixed Income Monthly Update Commentary: December 2025

01/09/2026

November’s CPI report, published in mid-December after the Federal Reserve’s (the Fed) rate setting meeting, was one of the first reports to cover the period of the government shutdown. November CPI declined to 2.7% year-over-year, and Core CPI declined to 2.6% year-over-year. Given the lack of data collection throughout the shutdown there is some investor skepticism surrounding the inflation measure, leading to a lack of meaningful conclusions on inflation despite the decline. The Fed reduced rates once more in December, by 25 basis points. Chair Powell noted, however, that the pace of rate cuts is likely to slow in 2026 and 2027. The absence of data fueled additional dissent within the voting members of the FOMC, with two members calling for no cuts and one member calling for a jumbo cut. At the end of the month markets were more hesitant to price future cuts, with only some degree of confidence that it will come in the middle of the year.

Integrity Monthly Commentary: December 2025

01/08/2026

Around mid-year 2024, value characteristics started to underperform significantly. That trend continued through 2025. 

2025 was a momentum market with narrow leadership, driven by retail investors and short-term traders.

Victory Income Investors’ Year in Review & 2026 Outlook

12/29/2025

In the second half of 2025 we saw uncertainty surrounding monetary policy continue. While economic data signaled a weaker labor market and inflation persisted above target, risk assets consistently performed positively. Despite prices reflecting positive investor sentiment, markets largely expect a deceleration in economic growth in 2026 driven by multiple factors including tariff policy, employment weakness and stretched valuations. The Fed started to cautiously ease again, but division within the Fed on what represents the largest threat to the economy is likely to continue into 2026, particularly given pressure from various parties to reduce rates. 

Integrity Monthly Commentary: November 2025

12/10/2025

Which scenario will the market bless: Continued Magnificent 7, Hyperscaler, AI driven momentum investing; a pivot to smaller more value-oriented companies; or none of the above? 

Victory Income Investors’ Fixed Income Monthly Update Commentary: November 2025

12/05/2025

October’s CPI report was cancelled in late November following the government shutdown given the Bureau of Labor Statistics was unable to retroactively collect the data. November’s CPI report has also been pushed out to December 18th, leaving many market participants and the Federal Reserve (the Fed) without critical data heading into the December FOMC meeting starting on the 9th. While alternative data exists such as state-level jobless claims or private data reports on inflation the data blackout caused some market volatility in November. At the end of the month markets were still pricing in an 83% chance that the Fed will cut in December, but the conviction of this bet fluctuated notably throughout the month.

WestEnd Advisors' Mid-Quarter Macro Update Q4 2025

11/20/2025

A government shutdown-induced data blackout temporarily reduced visibility into the state of the economy. Our analysis of alternative data sources, such as high-frequency data, suggests that economic activity has held up well in recent months following a slowdown in the 1H of the year, driven by resilient consumer spending and productivity gains.

Integrity Monthly Commentary: October 2025

11/07/2025

2025 could possibly be the worst year ever for active managers in the small cap space. Less than 2% of managers outperformed their respective Russell 2000 benchmarks in October. Year-to-date performance (YTD) is only slightly better. In fact, the average small cap value manager has trailed the Russell 2000 Value by over 500 basis points this year, and roughly only 15% of managers have beaten the benchmark. The last six months have been worse with the average manager trailing by over 600 basis points. (Jefferies: SMID- Mgr Scorecard 11/2/2025)

Victory Income Investors’ Fixed Income Monthly Update Commentary: October 2025

11/05/2025

September CPI, reported in October, rose to 3.0% year-over-year and Core
CPI declined to 3.0% year-over-year. In October the Federal Reserve (the Fed)
cut rates, meeting market expectations. The rate cut came as the Fed is facing
the additional challenge of less available data due to the government
shutdown. September inflation was tamer than expectations but Chairman
Powell’s press conference following the rate decision had a more hawkish
than expected tone, highlighting that there are still concerns about inflation
within the FOMC (Federal Open Market Committee). We saw two committee
members dissent at October’s meeting, in opposite directions, making this the
third time this has occurred since 1990. Markets are still pricing in one more
cut for 2025 but have reduced the number expected in 2026 from 4.5 to 3 in
response to Powell’s comments.

Integrity Monthly Commentary: September 2025

10/08/2025

Our Mid Cap Value and SMID Value strategies beat their respective benchmarks for the third quarter of 2025. However, I don’t recall a quarter in the years we have been managing money where we underperformed (Small Value Strategy) by so much yet still felt it was a solid quarter. According to Morningstar data, the Russell 2000 Value Index ranked in the 8th percentile for the quarter. While we trailed the index, our performance placed us in the top quartile for the quarter.

Victory Income Investors’ Fixed Income Monthly Update Commentary: September 2025

10/03/2025

August CPI, reported in September, rose to 2.9% year-over-year and Core CPI remained at 3.1% year-over-year. In September the Federal Reserve (the Fed) cut rates, meeting market expectations. The rate cut came as the Fed is facing a unique set of challenges: elevated inflation, weaker but not terrible labor data, and a high degree of uncertainty. The Fed has shown increased sensitivity to downside risks to full employment, indicating that they will be focused on future jobs reports. Markets are pricing in two more interest rate cuts through 2025 at the October and December meeting, increasing expectations month over month.

Integrity Monthly Commentary: August 2025

09/10/2025

Finance class will tell you the price of anything is the sum of its discounted cashflows. Pretty simple. That same class will tell you that the stock market is a real-time discounting mechanism making future estimates of these cashflows. Or as Morgan Housel says, “every market valuation is a number from today multiplied by a story about tomorrow.” This is where the opportunities and threats evolve in investing.

Victory Income Investors’ Fixed Income Monthly Update Commentary: August 2025

08/09/2025

July CPI, reported in August, remained at 2.7% year-over-year and Core CPI rose to 3.1% year-over-year. In August Chair Powell led his last Fed annual symposium in Jackson Hole Wyoming. During this speech Powell signaled a bit more definitively that the Fed may reduce rates in September, but reemphasized that these decisions hinge on the economic conditions versus political pressure from the executive branch. Market pricing for interest rate cuts held at two cuts through 2025, slightly increasing expectations month over month.

Integrity Monthly Commentary: July 2025

08/08/2025

Last month, we highlighted how the cheapest stocks in our benchmarks (measured by price-tocashflow) were significantly underperforming this year. This month, we present new data confirming and expanding on that information. Further, we highlight two recent articles touting the timeliness and benefits of small cap investing. We also briefly touch on the role indexing and basket trading may play in relative performance. 

Victory Income Investors’ Fixed Income Monthly Update Commentary: July 2025

08/08/2025

June CPI, reported in July, rose to 2.7% year-over-year and Core CPI rose to 2.9% year-over-year. The Federal Reserve (the Fed) kept rates at 4.25%-4.50% at their July meeting. The Federal Open Market Committee (FOMC) voted 9-2, which marks the first time in more than 30 years that two voting members voted against a rate decision. In the press conference following the decision, Chair Powell indicated to reporters that it’s still too soon to comment on a September cut.

Integrity Monthly Commentary: June 2025

07/08/2025

The first half of the year has been nothing short of challenging. Tariffs, Department of Government Efficiency (DOGE) spending cut noise, deficit concerns, wars, and interest rate volatility all created bouts of short-term heartburn.

Victory Income Investors’ Fixed Income Monthly Update Commentary: June 2025

07/07/2025

May CPI, reported in June, rose to 2.4% year-over-year and Core CPI held at 2.8% year-over-year. The Federal Reserve (the Fed) kept rates at 4.25%-4.50% at their June meeting. The decision was unanimous, reiterating the “wait and see” approach amidst uncertainty in the economic outlook. With expectations for weaker growth becoming consensus and driving rate cut expectations, Chair Powell noted that the Fed must be forward looking in its policy making. The July 9th tariff deadline has prompted questions as many trade deals are still in flux, and the true economic impact remains to be seen. Market pricing for interest rate cuts has been all over the place year-to-date, but ended the month at 2.5 cuts through the end of the year.

Victory Income Investors’ 2025 Mid-Year Outlook

06/30/2025

The economy has proven to be quite resilient despite elevated policy uncertainty. Corporate profitability remains robust and the unemployment rate, although off its lows, remains at a low level. While the inflation rate has trended down, the cumulative impact of price increases has taken a toll on the consumer. Coupled with the uncertainty over the final levels of U.S. tariffs, which have generated concern over economic growth as well as inflation, the probability of a recession has increased to 40%, up from 20% at year-end 2024, according to Bloomberg median consensus. At a minimum, the tariff situation has led to an expectation of slower growth and increased economic uncertainty. 

Victory Income Investors’ 2025 Mid-Year Outlook

06/30/2025

The economy has proven to be quite resilient despite elevated policy uncertainty. Corporate profitability remains robust and the unemployment rate, although off its lows, remains at a low level. While the inflation rate has trended down, the cumulative impact of price increases has taken a toll on the consumer. Coupled with the uncertainty over the final levels of U.S. tariffs, which have generated concern over economic growth as well as inflation, the probability of a recession has increased to 40%, up from 20% at year-end 2024, according to Bloomberg median consensus. At a minimum, the tariff situation has led to an expectation of slower growth and increased economic uncertainty. 

Victory Income Investors’ 2025 Outlook

12/16/2024

Fixed income investors may benefit from higher yields, as historically, fixed income returns have been highly correlated to starting yields. In our view, the potential for increased inflationary pressures and tighter-than-historical average credit spreads supports defensive credit positioning.

Victory Income Investors' 2024 Mid-Year Outlook

06/30/2024

Fixed income investors may benefit from higher yields as historically, fixed income returns have been highly correlated to starting yields. In our view, elevated recession risks and tighter-than-historical average credit spreads support defensive credit positioning.

Victory Income Investors - Monthly Fixed Income Market Update

06/30/2024

Year-over-year CPI for May came in at 3.3% driven by services inflation. This is down from 3.4% in April. Year-over-year Core CPI decreased as well, to 3.4%. June’s FOMC meeting left markets with the understanding that the Fed expects inflation to remain elevated in the near term but anticipates it will fall in 2025.

Integrity Catalyst Monthly

06/30/2024

Late-cycle conditions continue with the economy facing lagged impacts of Fed tightening, tougher lending standards, and declining profits. We continue to avoid or underweight the most economically cyclical parts of the markets.

Victory Income Investors - Monthly Municipal Bond Market Update

08/31/2023

Munis returns remain positive year-to-date, despite negative returns for the month across all fixed income indices, driven largely by a continued rise in rates.

WestEnd Advisors - Lingering Late-Cycle, Lagged Headwinds

08/31/2023

Late-cycle conditions continue with the economy facing lagged impacts of Fed tightening, tougher lending standards, and declining profits. We continue to avoid or underweight the most economically cyclical parts of the markets.