Quick shot: Rates and fixed income
J.P. Morgan Wealth Management
What do Jerry Maguire and our 2025 Outlook for rates and fixed income have in common? You had them at carry-like returns!
As we dive into 2025, we see potential for another year of positive returns in stocks and bonds. With the Federal Reserve poised to continue its gradual rate-cutting journey, we anticipate a landscape where carry-like returns take center stage. What are carry-like returns? They are the income you earn from holding bonds or other fixed-income investments, mainly through regular interest payments rather than from changes in the investment's price.
Work with an advisor
Our advisors can provide ongoing financial advice on how your portfolio can adapt to the changes in the market, your life and your goals.
Bonds play a crucial role in your portfolio, potentially acting as a buoy during market pullbacks and providing a reliable source of income. They also help diversify your investments and may reduce overall risk. For those who have enjoyed compelling yields on cash over the past couple of years, note that those yields have already fallen by more than 1% as the Federal Reserve rate-cutting cycle got underway. We don’t think reinvestment risk on cash is going away any time soon and now is the time to consider whether you’re holding onto excess cash and if it might better serve your financial goals invested elsewhere.
As Jerry Maguire might remind us, "help me help you" with these opportunities by staying strategically positioned in fixed income.
Please see “Outlook 2025: Building on strength” for additional insights on our year-ahead outlook.
Many segments of fixed income now out-yield cash
All market and economic data as of 01/08/25 are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.
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