The money and bond markets received another solid jobs report last week. Indeed, the unemployment rate remained at historic lows, while new job creation maintained its upward trajectory compared to 2017. The fixed income arena has become somewhat accustomed to this development, and as a result, the attention has shifted to another vital part of the monthly employment data: wages.

Although U.S. interest rates have risen from their record-setting depths, there is no doubt that, from a historical basis, they still remain rather low. Against this backdrop, I am asked on a regular basis: What’s a prudent strategy that fixed income investors can follow to not only help mitigate the potential for a further move up in rates but also take income-conscious needs into consideration?

The labor market backdrop in the U.S. continues to remain on solid footing. However, there is still a recurring theme that investors have been observing when they examine the monthly employment report: robust job growth with a lack of forward momentum for wages.

Over the last year, the discussion surrounding the potential for an inverted yield curve, and what that event could be signaling from a broader macroeconomic backdrop, has picked up steam. Well, here we are on the cusp of longer-dated yields being below shorter-dated rates, and investors still seem to be trying to figure out if this time will be different.

Looking at recent developments in the developed world’s sovereign debt markets, an investor could be excused for feeling like they are on a roller-coaster ride. From the beginning of May through the third week of June, market participants witnessed surging U.S. Treasury 10-Year yields, followed by chaos in the Italian bond market, which led to some noteworthy flight-to-quality trades in both the U.S. and Germany.