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2026 Bond Market Rally Expected Amid Defensive Strategies

12/20/2025

Summary

Story summary

Bank of America's chief investment strategist Michael Hartnett says a 2026 bond market rally may occur, driven by macro factors and positioning.
Investors hold only 4% of their $4 trillion in Treasuries, with equities favored.
Hartnett expects a negative growth quarter in late 2025 and inflation near 2% by mid-2026.
Fiscal stimulus from U.S. President Donald Trump could lift inflation and rates.
Hartnett emphasizes defensive investments over chasing risk.

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Story summary

Bank of America's chief investment strategist Michael Hartnett says a 2026 bond market rally may occur, driven by macro factors and positioning.
Investors hold only 4% of their $4 trillion in Treasuries, with equities favored.
Hartnett expects a negative growth quarter in late 2025 and inflation near 2% by mid-2026.
Fiscal stimulus from U.S. President Donald Trump could lift inflation and rates.
Hartnett emphasizes defensive investments over chasing risk.