Written by Erik Laymon, Portfolio Analyst
April 30, 2025

In Laymon’s Terms: What’s the Deal with Bonds Today?

Hey investors! It’s your friendly investment analyst, back with another “In Laymon’s Terms.” Today, we’re diving into bonds—because they’ve been making headlines lately. I’ll break it all down in plain English, so grab a coffee and let’s talk about what’s happening with bonds, why a diversified bond sleeve matters, and what’s really moving the markets.

What’s the Deal with Bonds Today?

The bond market is on a wild ride, rocked by interest rate changes from the Fed, inflation worries, and global issues like trade tensions. In April 2025, a big bond selloff happened due to tariff fears, pushing the 10-year Treasury yield up sharply—the biggest weekly jump since 2021. Earlier in the year, yields were steady, but the Fed’s rate cuts since September 2024 haven’t calmed inflation or trade uncertainty, so yields remain volatile.

For investors, bonds are both an opportunity and a safe haven, but it’s trickier than before—so understanding the landscape is key.

Why a Diversified Bond Sleeve Is Your Secret Weapon

A “diversified bond sleeve” just means holding a mix of different bonds in your portfolio—varied maturities, risks, and issuers. Here’s why it matters now:

  • Less Risk: Spreading investments across different bonds may help reduce the impact of any one problem—don’t put all your eggs in one basket.
  • More Opportunities: With yields jumping, sometimes short-term bonds are better, sometimes long-term. A mix lets you benefit from both.
  • Stronger in Tough Times: A diversified sleeve helps your portfolio handle market ups and downs, like the April 2025 selloff, more smoothly.

In calmer times, a simple bond strategy worked, but now, with so much uncertainty, diversification is more important than ever.

What’s Really Moving the Markets and Economy?

  • The Fed: Rate cuts started in September 2024 to boost growth but balancing that with inflation is tricky. Surprises in policy or spending can shake things up.
  • Inflation vs. Growth: The economy is steady, but inflation is still above the Fed’s 2% target, making investors nervous about bond values.
  • Trade Troubles: Tariffs can push prices up and slow growth, as seen in April’s bond selloff.
  • International Factors: Global tensions and differing central bank policies affect money flows and bond yields everywhere.

All these factors make markets unpredictable but also create opportunities for savvy investors.

Putting It All Together

The bond market is like a rollercoaster—pushed by Fed moves, inflation, and trade shocks. A diversified bond sleeve may help steady your portfolio, offers growth potential, and helps you weather the bumps. With yields up after the April selloff, bonds are cheaper to buy, but still unpredictable—so spreading your investments is important.

Stocks have their own challenges, so bonds, especially a good mix, can be a good alternative. Remember: diversity is your friend. Understand the risks, seize the opportunities, and keep your portfolio ready for anything. Until next time, invest smart and stay diversified!

*Bonds are subject to availability and market conditions; some have call features that may affect income. Bond prices and yields are inversely related: when the price goes up, the yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity.

**Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

***This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.