Investing Insights

Fixed-income investors, bonds are rising to the occasion and looking attractive again. Their yields are higher, and they have delivered as diversifiers against stock sell-offs this year. Yet, uncertainty has muddled the outlook as the bond market seeks clarity about tariffs, inflation, and interest rates.Paul Olmsted covers US fixed-income strategies for Morningstar Research Services. The senior manager research analyst explains why you need bonds for a balanced portfolio.Let’s start with how you’re thinking about the bond market in 2025. Can you talk about what you have considered key moments this year? As a follow-up, what is at the core of the bond market’s concerns?We’re recording this episode on July 30th around 10:30am. The Fed is expected to announce their interest-rate decision this afternoon. Market watchers are predicting the Fed will hold rates steady. High interest rates pose a risk to bonds. What other risks should investors watch out for now? Some bond investors are seeking a “Powell hedge” due