2026 Third Quarter Considerations

Market Commentary· Research
The Wealthspire Investment Team
By The Wealthspire Investment Team
October 8, 2026 · 1 min read
 

Return Expectations for Fixed Income are Higher
Bond markets experienced extreme interest rate moves during the third quarter, against a backdrop of sticky inflation, resilient economic growth, government deficit concerns, and shifting monetary policy expectations. The 10-year Treasury yield touched the highest level in over 20 years and now sits closer to the long-term average after decades of low interest rates. While price movement has been painful in the near-term, current starting yields, a reasonably strong indicator of future fixed income performance, put the long-term outlook for fixed income returns at a favorable level.

The Coupon Cushion is Supportive
The Federal Reserve hiked interest rates in September, the first time since 2023. With yields higher, the risk/reward trade off in fixed income is skewed positive. Due to the increased cushion from income, the Bloomberg Agg can withstand an approximately 100 basis point move higher in rates and still “break even” over a 12-month period. For context, this cushion was only ~25 basis points at the start of 2022. Conversely, there is meaningful upside potential should rates move lower from here. 

 

The Wealthspire Investment Team
The Wealthspire Investment Team

This information is intended for the exclusive use of clients, prospective clients, and parties to whom it was provided by Wealthspire Advisors LLC, Wealthspire Institutional, LLC, and Wealthspire Retirement, LLC dba Wealthspire Retirement Advisory (collectively referred to as “Wealthspire”). The information contained herein is confidential and proprietary information of Wealthspire. Its contents may not be modified, disseminated, or distributed to any other person or entity without prior written approval of Wealthspire. Information has been obtained from sources believed to be reliable, though not independently verified and should not be regarded as a complete analysis of these subjects. The opinions and analysis expressed herein are based on Wealthspire’s research and professional experience and are expressed as of the date of this report and subject to change without notice. Any forecasts are hypothetical and represent future expectations and not actual returns. This does not contain investment advice. Please consult with your advisor, attorney, accountant, or other professionals, as appropriate, before making any investment, tax, or legal decisions. Past performance does not indicate future performance and there is risk of loss. This document is for informational and educational purposes only and is not an offer/recommendation to buy or sell any security, instrument, or strategy. Investment advisory services offered through Wealthspire Advisors LLC, Wealthspire Institutional, LLC, or Wealthspire Retirement, LLC, each separately registered investment advisers.

Subscribe to our newsletter

Get the latest news & perspectives from Wealthspire.