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Bond traders are growing more convinced that US yields are heading lower as they bet on a series of Federal Reserve interest-rate cuts, yet the path to cheaper borrowing costs is set to be extremely bumpy.

The San Francisco-based bank warned for months that charge-offs were likely to start rising as some office-related loans went bad. It began to happen in the fourth quarter, which could be an omen for regional banks that have larger concentrations in the office sector.

Stronger demand for auctions and the recent popularity of the 20-year could already be compelling the department to consider increasing the size the bank's strategists say.

The coupons on the class A notes steps up after four years by 100 basis points, but the coupons are subject to a net weighted average coupon (WAC) cap.

Ultimately, firmwide headcount will decline by 60,000 jobs to 180,000 by the end of 2026, Chief Financial Officer Mark Mason said.

The decline in profit came mainly from a $2.1 billion FDIC assessment and a $1.6 billion charge tied to the shift away from LIBOR.