Invesco asks "What will ongoing Fed rate cuts mean for fixed income?" The piece, written by Matt Brill and Todd Schomberg, tells us, "After being on hold at 5.​5% since July of 2023, the Federal Reserve (​Fed) announced a 50 basis point rate cut in the federal funds rate on September 18. The move shows that the Fed is doing its best to stay in front of often conflicting economic releases. In the following article, the Invesco Fixed Income Investment Grade team discusses the current fixed income landscape, and ideas to take advantage of falling rates." It explains, "This past rate hiking cycle was the fastest on record, and we think they will cut just as quickly. We have been adding some credit risk to the portfolios to take advantage of the expectation of lower rates. Not only should the shape of the curve return to normal, but we expect a parallel shift downward as well, which will likely be good for bond prices overall." The update adds, "The uncertainty in the market combined with attractive yields on short-​term securities made moving out the yield curve a tough decision. We have been expecting flows to come into investment grade asset classes, but it seems everyone was waiting for an all-​clear signal from the Fed. Now that we'​ve seen the first cut, we expect to see a lot of that money move into asset classes with some duration."

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