Market Decode: 3 questions top of mind for bond investors now

Tariff-related trade disputes have been causing unexpected volatility in the bond markets. Here’s what you need to know.

 

BONDS ARE AN IMPORTANT PART of a balanced portfolio, offering potential stability and predictable income. But like equities, they’ve been experiencing extraordinary volatility as a result of current policy uncertainties.

 

“We know investors have concerns about what’s going on in the bond markets and what it could mean for their portfolios. But there’s also a risk in making sudden decisions based on ominous headlines and rapidly changing events,” says Matthew Diczok, head of Fixed Income Strategy for the Chief Investment Office (CIO), Merrill and Bank of America Private Bank.

 

In the video above, he offers insights that can help put the recent volatility in perspective and suggests ways investors can consider taking advantage of current higher yields. “Treasurys, like the U.S. economy and the dollar, remain pivotal to the global economy. That’s not something we see changing, even with disruptive tariff battles,” he adds.

 

For ongoing help keeping up with the risks and potential opportunities in today’s markets, check out Market Briefs, featuring up-to-the-minute market commentary, and tune in regularly to the CIO's Market Update audiocast series.

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Important disclosures

The opinions expressed are as of 4/23/2025 and are subject to change.

 

Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.

 

Investments have varying degrees of risk.  Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government.

 

The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).

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