ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Let's tackle tapering first. How do you expect the whole process of tapering to unfold through 2014?

KATHLEEN GAFFNEY, VICE PRESIDENT, EATON VANCE, (ENGLISH) SAYING:

I think it will unfold gradually and the market is expecting it, so it won't be a problem. In fact, I think that as the Fed begins to reduce its purchases, that there is ample demand for high quality collateral and it should go smoothly, at least in terms of the markets' reaction. I think it will, however, create pockets of opportunity as different markets begin to re-price.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Alright. Before we get to some of those opportunities, let me ask you the other big question and that, of course, how the Fed changes under Janet Yellen. Do we see radical changes in monetary policy and communication to investors in the bond markets?

KATHLEEN GAFFNEY, VICE PRESIDENT, EATON VANCE, (ENGLISH) SAYING:

I think communication is key, although I don't see any major changes. I think Yellen is in a good place to manage the unwinding of the stimulus. In fact, I think the market expectations of her being a dove are overdone and I think she really would like to see, as Bernanke does as well, a passing of the baton from the public sector to the private sector.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Alright. Let's now turn toward opportunities in fixed income which we know has been a difficult place for some investors to maneuver the last couple of years quite frankly. How does that change in 2014? Let's start first with treasuries. Is there a place on the yield curve that you expect to see more value in 2014?

KATHLEEN GAFFNEY, VICE PRESIDENT, EATON VANCE, (ENGLISH) SAYING:

I think it's going to be a very tough year for treasuries. I wouldn't say it's going to be a good year at all, and so I would avoid treasuries. The short end doesn't offer much in terms of income and I think the likelihood that we're looking at a 4% 10-year is quite high, so I would get out of the way of taking interest rate risk in treasuries.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

When would we hit 4% in your view?

KATHLEEN GAFFNEY, VICE PRESIDENT, EATON VANCE, (ENGLISH) SAYING:

I think we're going to get off to the races this year, and I would not be surprised to have that occur sometime in the second quarter.