After the Federal Reserve’s first rate cut of the year, investors wonder how they can better position portfolios in a changing bond market. Thornburg’s Christian Hoffmann and VettaFi’s Todd Rosenbluth noted that while the bond market initially reacted positively, much of the impact was already priced in, and expectations for further cuts are stronger than anticipated. 

Hoffmann emphasized that the market is at an inflection point driven by both economic data and potential changes in the Fed’s composition under political pressure. He argued investors should remain overweight duration and prepare for the possibility of a more dovish Fed with tools such as yield curve control. 

Against this backdrop, Hoffmann highlighted the role of active management, pointing to Thornburg’s Core Plus Bond ETF (TPLS) for flexible core exposure and its Multi-Sector Bond ETF (TMB) for income diversification. 

Finsum: Active funds could provide solutions in an uncertain rate environment, echoing the adage: “Don’t fight the Fed.”