Skip to main content
PGIM InvestmentsPGIM Investments
    • Mutual Funds
    • Target Date Funds
    • Closed End Funds
    • Separately Managed Accounts
    • ETFs
    • Buffer ETFs
    • Alternatives
    • Retirement Spending
    • Thought Leadership
    • Events and Webinars
    • On the Markets
    • Investment Themes
  • Overview
    • Forms
    • Tax Center
    • Corporate Actions
    • Open Mutual Funds Account
    • Overview
    • DCIO Mutual Funds
    • DCIO Target Date Funds
    • Defined Contribution Insights
    • Retirement Spending
  • Overview
    • Newsroom
    • PGIM Custom Harvest
    • PGIM Fixed Income
    • PGIM Real Estate
    • PGIM Quantitative Solutions
    • Jennison Associates
  • Contact

Bonds Increasingly Attractive If Fed Cuts Rates

Bonds Increasingly Attractive If Fed Cuts Rates

Share

ONE-YEAR TOTAL RETURN EXPECTATIONS

For illustrative purposes only. There is no guarantee that these results will be achieved.

Source: Bloomberg, Morningstar, PGIM Investments, as of 12/31/2023. Short-Term Bonds represented by Bloomberg Short-Term U.S. Aggregate Bond Index and Intermediate-Term Bonds represented by Bloomberg U.S. Aggregate Bond Index. Analysis is for illustrative purposes only, with yield-to-worst as the starting point for one-year return expectations and the impact of rate increase or decrease in the yield curve given the duration of each index. Investors cannot invest directly in an index.

CHART HIGHLIGHTS

  • The Federal Reserve recently signaled potential rate cuts in 2024 after raising rates 525 basis points between March 2022 and July 2023. 
  • Given elevated bond yields, one-year total return expectations for bonds have increased, particularly if rates fall as anticipated by markets.  

Related Insights

  • ACTIVELY INVESTING THROUGH PARADIGM SHIFTS

    Dec 12, 2024

Footnotes

Bloomberg U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. It covers the U.S. investment-grade, fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Bloomberg Short-Term U.S. Aggregate Bond Index is a subset of the Bloomberg U.S. Aggregate Bond Index, consisting U.S. dollar denominated investment-grade taxable bonds with remaining effective maturities between one and five years. Investors cannot invest directly into an index.

Investing involves risks. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost.  

The views expressed herein are those of PGIM Investments professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. This commentary does not purport to provide any legal, tax, or accounting advice.  

Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice.  

Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change.  

© 2025 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property and a service mark of MSCI, Inc. (MSCI) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (S&P). GICS classifications and related GICS information are provided “as is” with no express or implied warranties. Bloomberg®, Bloomberg Short U.S. Aggregate Bond Index, Bloomberg U.S. Aggregate Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by PGIM Investments. Bloomberg is not affiliated with PGIM Investments, and Bloomberg does not approve, endorse, review, or recommend PGIM Investments products. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to PGIM Investments products. Frank Russell Company (FRC) is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination, or redistribution is strictly prohibited. This is a presentation of the Russell Index data. Frank Russell Company is not responsible for the formatting or configuration of this material or for any inaccuracy in presentations thereof. 

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional.  

Investment products are distributed by Prudential Investment Management Services LLC, member FINRA and SIPC. PGIM Investments is a registered investment advisor and investment manager to all PGIM U.S. open-end investment companies. PGIM Custom Harvest, PGIM Quantitative Solutions, Jennison Associates and PGIM are registered investment advisors and Prudential Financial companies. PGIM Quantitative Solutions is the primary business name of PGIM Quantitative Solutions LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate are units of PGIM.  

© 2025 Prudential Financial, Inc. and its related entities. PGIM Custom Harvest, Jennison Associates, Jennison, PGIM Real Estate, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 

For compliance use only 1076989-00002-00

  • About Us

    • Overview
    • Newsroom
    • PGIM Fixed Income
    • PGIM Real Estate
    • Jennison Associates
    • PGIM Quantitative Solutions
    • Contact
  • Products

    • Mutual Funds
    • ETFs
    • Buffer ETFs
    • Target Date Funds
    • Closed End Funds
    • Separately Managed Accounts
    • Retirement Spending Funds
  • Insights

    • Thought Leadership
    • On the Markets
    • Investment Themes
  • Resources

    • Overview
    • Forms
    • Tax Center
    • Careers
  • Retirement

    • Overview
    • DCIO Investments
    • Meet the Team
PGIM Investments
  • Terms & Conditions
  • Privacy Policy
  • Accessibility
  • Cookie Preference Center

Proxy Voting Recordsopens in a new window | Audit Committee Charter | Audit Committee Charter (Alternatives)opens in a new window | Directors/Trusteesopens in a new window | Disclosure of Portfolio Holdings | Form 5500 | Nominating & Governance Committee Charter | Nominating & Governance Committee Charter (Alternatives)opens in a new window | Compliance Committee Charteropens in a new window | Sales Load Breakpoints | Customer Loginopens in a new window | Careersopens in a new window

This site is intended for U.S. investors only.  All investments involve risk, including loss of principal.

PGIM, the principal investment management business of Prudential Financial, Inc. (PFI), is comprised of several business units, including PGIM Investments.   PGIM Investments, a subsidiary of PFI, is an investment adviser and the investment manager to all PGIM US open-end investment companies and manager or administrator to closed-end investment companies. Other PGIM businesses that may sub-advise certain PGIM Investments open and closed-end investment companies include:  PGIM Real Estate, Jennison Associates, PGIM Quantitative Solutions LLC, PGIM Limited, and PGIM Fixed Income. Investment products are distributed by Prudential Investment Management Services LLC,  member FINRAopens in a new window, SIPCopens in a new window and affiliate of PGIM Investments.   Any content relating to securities is the sole responsibility of PIMS, unless otherwise noted.  Check the background of this firm on FINRA’s BrokerCheckopens in a new window.

By accessing links on this web site, you may be leaving PGIM Investments and PIMS and be directed to PGIM Affiliate sites.

Separately managed accounts are offered through PGIM, Inc., Jennison Associates, PGIM Custom Harvest, and PGIM Quantitative Solutions LLC.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional.

© 2025 Prudential Financial, Inc. and its related entities. Jennison Associates, PGIM Real Estate, PGIM Custom Harvest, PGIM, and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.

 

INVESTMENT PRODUCTS: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED

 

3972195

 

You are viewing this page in preview mode.

Edit Page