A key question on investors’ minds is: where are long-term interest rates headed from here? And right behind this query is: how do I invest in the bond market, not only for right now, but perhaps more importantly, for the future?
In order to figure out where the U.S. Treasury (UST) 10-year yield may be going, it is necessary to remember how longer-dated UST yields got to where they currently reside in the first place. It was not one or two forces, but rather a confluence of factors, such as good growth, sticky inflation, Fed (Warsh-related) policy uncertainty and supply considerations (Treasury and AI-related) and it seems highly likely that the forces which pushed the UST 10-year yield to a more than twenty-year high watermark are not going away anytime soon.
In our opinion, investors should be prepared for this elevated, ‘normal’ rate setting, with heightened volatility, for the foreseeable future, and offer solutions for how a bond portfolio should be positioned for a 5% bond world.
In this “normal,” but elevated rate environment, investors should focus on strategies that can provide income potential while mitigating rate risk and upside volatility, specifically by managing duration. WisdomTree offers three strategies built to do exactly that. Together they form a zero-duration suite that spans the credit spectrum, from Treasuries to investment grade to high yield.
Market perceptions can shift quickly and with little warning. We believe a time-tested barbell approach is especially valuable during ongoing, elevated bond volatility. A barbell approach can help fixed income investors navigate these periods without having to make a specific interest rate “call".
The WisdomTree Zero Duration Suite can also be used as a cornerstone for fixed income strategy in the current and prospective rate environment. But, for investors who wish to ‘play in the 5% bond world’, we would suggest pairing this suite with a core duration vehicle, AGGY, in a barbell approach. This gives investors a flexible way to stay invested in core fixed income as the regime shifts.
Watch this video to learn more about the WisdomTree barbell strategy, how it works and the tool you can use to see the impact of various fixed income allocations in your portfolio.
Source: Bloomberg, as of 11/09/26
Data represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed or sold in the secondary market, may be worth more or less than the original cost. Current performance may be lower or higher than the performance shown. For the most recent month-end performance please click here.
Click here for Standardized performance data and other important.
The ETF Express US Awards recognizes excellence among ETF issuers and service providers across a wide range of categories. It was an honor to be singled out among our peers at such a critical time in fixed income, when investors need innovative solutions for navigating rising rates.
October 28, 2026
In this edition of WisdomTree Office Hours, Professor Jeremy Siegel joins Jeremy Schwartz and Kevin Flanagan to discuss the latest FOMC meeting, Fed policy outlook, rising Treasury yields, AI stock valuations and bond investing strategies. Discover how inflation risks, corporate earnings and the midterm elections could shape financial markets.
September 16, 2026
In this edition of WisdomTree Office Hours, Professor Jeremy Siegel joins Jeremy Schwartz and Kevin Flanagan to discuss the Fed’s latest rate decision and what it means for markets. They examine higher long-term yields, resilient economic growth, AI investment, inflation pressures and the potential for productivity gains.
Divided government may not deliver the fiscal restraint bond investors expect. Kevin Flanagan examines why spending priorities and existing legislation could keep deficits elevated despite the midterm election results.
Treasury yields have fallen as AI and tech worries revive safe-haven demand, but the forces that pushed yields higher have not disappeared. Kevin Flanagan and Maggie Lucier examine why growth, inflation, Federal Reserve policy uncertainty and debt supply could regain investors’ attention once the flight to quality fades.
At the October Fed meeting, the FOMC held rates at 3.75% to 4.00%, as expected, while sticky inflation kept a December hike in play. Kevin Flanagan examines the Fed’s wait-and-see approach and why recent Treasury yield declines may not signal that upward pressure has passed.
For more daily insights from our thought leaders, visit our blog.
