Bond yields have climbed sharply this year, but the story looks different from the painful repricing of 2022. This time, much of the rise reflects stronger real yields rather than runaway inflation fears, and economic growth has stayed resilient. The upside is higher starting income, which can cushion prices if rates keep rising and has historically been followed by solid returns when yields start this high. The twist is that the average hides big differences underneath. Some lower rated corporate bonds have held up while highly rated ones have lagged, showing how much duration and credit choices matter. Weaker borrowers may struggle with expensive financing, while heavy issuance tied to AI infrastructure is creating both opportunities and new risks to weigh. That mix favors managers who combine credit research, duration management and careful security selection to capture income while keeping risk in check.

Finsum: The spread between winners and losers inside the market is wide, and selectivity may matter more than ever for investors who want income without surprises.