Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Investing Insights is helping investors

navigate market volatility. Morningstar Strategists and authors will deliver timely insights,

trends, and tips. These episodes will regularly pop into your podcast feed. 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 selloffs this year.

Yet uncertainty has muddled the outlook as the bond market seeks clarity about tariffs, inflation, and interest rates.

Joining me is Paul Amstead, who covers U.S. fixed income strategies for Morning Star Research Services.

The senior manager research analyst explains why you need bonds for a balanced portfolio.

Welcome to the podcast, Paul.

Ivana, thank you for having me. I'm excited to be here.

Awesome. I'm glad you're here. So let's start with how you're thinking about the bond market in 2025.

Can you talk about what you consider to be key moments this year? Let's start with how you're thinking about the bond market in 2025.

Can you talk about what you consider to be key moments this year?

Well, I think there are three key moments that I've identified.

First one is perhaps obvious, and that's Liberation Day.

And the president came out and said, we are going to increase tariffs on this effectively the entire world.

You know, the bond market reacted with, you know, higher, higher long-term yields and

wider credit spreads.

The second is, is really kind of the approval of the president's budget.

And, you know, with that comes a much higher debt burden for the U.S.

And I think that has the chance of keeping long-term yields elevated for a long time.

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