Two potential paths off the sidelines: shorter maturities for interest-rate-sensitive clients, and high-yield corporate bonds for those who can accept credit risk.

Key takeaways:

• With the Iran war, sticky inflation, new tariff developments, and interest rate policy uncertainty center stage, investors should be prepared for volatility if they are focused on potentially higher-yielding opportunities.
• Yet investors don’t necessarily need to remain in cash. Short- and intermediate-term bonds may provide attractive income with less interest-rate risk than longer-term bonds, while high-yield corporate bonds might make sense for clients comfortable with greater credit risk at a shorter duration.
• And for clients with longer-term fixed income needs, investment-grade corporate bonds may offer opportunities to capture attractive yields, depending on risk tolerance and time horizon.