Bonds Bounce Back in 2025, Can They Continue to Provide Stability in 2026?

Vanguard's Chief Investment Officer Sara Devereaux discusses the fixed-income strategy and evolution of the bond market, with ETFs and active management playing a significant role. In 2025, bonds provided income, stability, and protected portfolios against downside risks, driven by elevated starting yields, credit spreads, and price appreciation. Looking ahead to 2026, Devereaux sees risks including potential inflation, monetary policy changes, and increasing interest rates.