Core thesis
Bonds can again provide income and portfolio ballast, but a wide policy-rate confidence range argues for staggered duration rather than a single large extension.
What the evidence says
The September 2026 Federal Reserve projections showed a 4.1% median year-end policy rate for 2026.
The Fed also showed a plus or minus 0.5 percentage-point historical projection error range for 2026 short-term rates.
The IMF's July update projected 2026 global growth of 3.0% and warned that disinflation had stalled.
Portfolio implication
Favor high-quality carry, add duration in tranches and keep inflation-sensitive assets as a separate hedge rather than relying on one macro forecast.
What would change our view
Inflation expectations re-accelerate
Fiscal risk steepens long-end curves
Credit spreads underprice recession risk
Primary sources
Public facts are linked to primary sources. Portfolio weights and return assumptions are illustrative.