Shocking Bonds: Evaluating Advisor Fixed Income Portfolios as the Fed Enters Its Next Phase

After two years of interest rate volatility that tried many advisors’ nerves, the outlook for bonds appears the healthiest we’ve seen in years thanks to two key factors: Starting yields are near their highest levels in more than a decade, and the Federal Reserve is expected to start easing policy this year.

Of course, advisors are understandably cautious. The historic rate rise in 2022 led to negative returns in most fixed income sectors. Advisors then started moving cash off the sidelines in 2023 and 2024 as yields reset at healthier levels – only to encounter renewed volatility.

However, history suggests that today’s starting conditions should add up in bond investors’ favor.

This content is provided for educational purposes only and should not be viewed as investment advice or as an offering of any product or strategy. Consult your financial professional for more information.