Federal Reserve officials have adopted a more dovish monetary policy stance, with the probability of a 25-basis-point rate reduction at the December policy meeting jumping from 25% to 74% in a single day according to the CME FedWatch tool. This shift followed comments from key policymakers including New York Fed President John Williams and Governor Stephen Miran, who downplayed persistent inflation concerns while highlighting rising downside risks to employment amid a cooling labor market.
Further signaling the change, decentralized prediction platform Polymarket reported odds of a rate cut surging to 81%, while financial institutions JP Morgan and Goldman Sachs revised their forecasts to predict a quarter-point cut this month. As of the latest data, odds stand at 87.2%, indicating the Fed appears more concerned about avoiding economic harm than elevated consumer prices.
This monetary policy shift could benefit Infrastructure Capital's actively managed Infrastructure Capital Bond Income ETF (ARCA: BNDS), which seeks to maximize current income while pursuing capital appreciation through fixed-income securities, primarily corporate bonds. The fund employs an option-writing strategy to enhance income and focuses on delivering above-market yields distributed monthly, aligning with typical financial obligation cycles.
The BNDS ETF's active management approach addresses what portfolio manager Jay D. Hatfield calls the "ergodic fallacy" - the mistaken assumption that long-term average behavior equals immediate system behavior. In non-ergodic credit markets where fundamentals can become divorced from intrinsic value due to liquidity shifts, spread changes, and rate expectation volatility, Hatfield's team uses proprietary protocols to identify mispriced opportunities. The fund maintains a hybrid exposure of approximately 84% fixed income and 16% preferred securities, achieving a 30-Day Sec Yield of 7.52% as of November 28, 2025.
A Federal Reserve rate cut would reduce risk-free yields, potentially making the BNDS ETF more attractive to investors seeking higher returns through managed risk. Hatfield, who also manages the Infrastructure Capital Small Cap Income ETF (ARCA: SCAP) and Virtus InfraCap US Preferred Stock ETF (ARCA: PFFA), leverages nearly three decades of experience across investment banking, energy infrastructure, real estate, and research to identify structurally mispriced opportunities in open, preferred, and derivatives markets.
