Bond bites: Ideas and insights in under three minutes

Market volatility has been front and center in recent weeks.  Investors have been navigating uncertainty on multiple fronts including shifting interest rate expectations, economic data surprises, and the latest developments in trade policy. The back-and-forth on tariffs has sent ripples through the stock markets.

But while stocks have been on a rollercoaster, high-quality bonds have provided a much-needed stabilizing force in portfolios. When risk assets sold off following the latest tariff escalation in early March, bonds held firm. Yields on investment-grade corporate bonds remained attractive, hovering around 5%, continuing to provide investors with strong income potential even in a volatile environment.

Municipal bonds have also demonstrated resilience. With economic uncertainty lingering, many state and local governments remain in solid fiscal health, supporting broad credit quality in the muni market. Additionally, the supply and demand dynamics have remained favorable, with limited new issuance helping to support valuations.

So, what does this mean for fixed-income investors? We believe both corporate and municipal bonds offer compelling opportunities right now. Investment-grade corporate bonds continue to provide strong income and diversification benefits, while municipal bonds remain a way to add stability to portfolios while earning tax-exempt income.

As markets digest the latest policy shifts, one thing remains clear — bonds continue to do their job, delivering income, diversification, and a ballast against stock market volatility.