2026 Fixed Income Playbook: What Matters Most
View original at finance.yahoo.com2026 Fixed Income Playbook: What Matters Most ETF Investing Tools Fixed Income as a Stabilizer Historically, fixed income and equity performance moved in different directions, with bonds tending to do well as equities declined, while bonds tended to lag as equity performance improved…
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Rates across the yield curve remain well above the level of inflation, enabling investors to generate a reasonable positive real return from fixed income, with potential for further gains if inflation continues to moderate.
60% confidenceFixed income markets have regained their traditional role as an offset to equity volatility in a diversified portfolio, with the rolling 52-week IEF-SPY correlation returning to its typically negative range.
60% confidenceA return to zero interest rate policy is seemingly remote, making current higher rate levels and associated income more durable.
60% confidence10-year real yields underscore fixed income's renewed potential to generate durable income while helping preserve purchasing power.
60% confidenceFixed income once again offers an attractive and potentially durable level of income at current more-normal rate levels, after over a decade of near-zero yields.
60% confidenceTraditional fixed income benchmarks capture only a portion of the investable universe, concentrated in high-quality, lower-yielding government-guaranteed issues, causing passive strategies to miss many higher-yielding opportunities outside those benchmark sectors.
60% confidence10-year real yields are meaningfully positive — highest since before the Global Financial Crisis — a notable departure from the post-financial-crisis period when real yields were often negative or negligible.
60% confidenceInflation will continue to trend lower despite remaining above the Federal Reserve's 2% target.
60% confidence