As stocks react to the chaotic tariff rollout and deteriorating confidence, bonds are quietly adjusting to a slower-growth outlook. It’s a direction we’ve prepared for in our fixed income portfolios.

Amid the barrage of headlines, it’s tempting to react to every juke the market throws at you. Where should you focus instead? Start with these three trends.

Inflation is cooling, the economy is resilient and starting yields offer a cushion against further rate volatility—there’s a lot to like about fixed income in 2025.

As investors prepare for the effects of higher-for-longer rates and a new administration in 2025, we offer five themes we think will drive fixed income markets in the first half of the year.

Strong economic growth coupled with inflation risks from potential policy shifts have paved the way for a prolonged period of higher interest rates. That could be a good thing for fixed income investors.

In a resilient growth environment with inflation trending downward, any short-term volatility from the market’s reaction to monthly data is likely an opportunity to buy.

With tight spreads and a steepening yield curve, we see the most value in lower-beta spread products and high-quality securitized assets.

Whatever the exact cause of recent volatility, the more significant point is that it was an opportunity to add credit risk amid a positive outlook.

The wealth effect will continue to support consumer spending, even as slowing wage gains and high prices weigh on low-income consumers.

As we approach the halfway point of the year, all eyes remain on Federal Reserve policy and the pace of inflation’s downward trend.