Munis, Tips, and More: Best Bonds to Buy Today -- Barrons.com

By Greg Bartalos

On Monday, I received a text from a friend who rarely writes to me about the markets. It read, "So much for the bond market." He isn't alone in his pessimism. Given the speed and magnitude of interest-rate increases, concerns are growing about a run on the bond market. The 10-year Treasury yield reached a 19-year high of 5.297% Tuesday, while the 30-Year Treasury yield set a 22-year high of 5.64% on Wednesday.

The rate spikes are driven by many factors, including high oil prices exacerbated by the war in Iran, rising inflation, tariffs, a resilient economy, the cost to finance the artificial-intelligence buildout, and expectations that the Federal Reserve will raise interest rates again before the midterm elections. Today, however, bond yields continued their ascent despite a decline in oil prices as fears grew that a 6% yield on the 10-year Treasury note is increasingly likely.

Although short-term bonds are least hurt by rising rates, rising rates have inflicted pain throughout the fixed-income universe. For example, municipal bonds are on pace for their worst month since 1987. Some see opportunity there, however. Burton Malkiel, author of A Random Walk Down Wall Street, says it is a good time to buy bonds, particularly tax-exempt municipal bonds and Treasury-Inflation Protected Securities (TIPS).

Barron's recently recommended munis, in addition to high-quality corporate debt and international bonds, among other bond investments. For those willing to tolerate more risk, long-term Treasuries may be worth a look. This week, The Wall Street Journal asked six investing pros where they see opportunity in the bond market.

"People recognize that once you get the 10-year above 5%, you tend to make money," says BlackRock's Rick Rieder, who is starting to "dabble" with adding longer-dated bonds. Ray Dalio, however, recommends caution, saying he believes that global bond yields will keep climbing as the supply of government debt overwhelms demand.

Also preaching caution is Dan Fuss, the legendary vice chairman of Loomis Sayles who is known as the "Buffett of Bonds." He says, "It would take a team of oxen to make me buy a 20-year bond." Fuss favors intermediate Treasuries that mature in five to seven years because they offer almost as much a return as longer-dated bonds but with less risk. Bond investors seeking even less risk can capture competitive yields with two-year Treasury notes.

Another opinion well worth considering is that of bond veteran Jim Bianco, who has turned bullish on U.S. Treasuries for the first time in six years, according to Bloomberg News. "This is a value play," says Bianco, president and founder of Chicago-based Bianco Research. "Everybody's ridiculously bearish on the bond market right now. I'm getting a big fat cushion for buying bonds at 5.2%. Now's not the time to be losing your mind over it."

Despite his strong endorsement, Bianco recommends gradually adding exposure instead of buying aggressively. "I'm dipping my toe." Still, on a historical basis, he says the current rise in yields is bringing the bond market in line with its historic average. "We are returning to normal," he said. "The zero rates from 2010-2020 were the ridiculous outlier."

Importantly, the math looks compelling when considering the risk and reward of buying bonds today. The article notes that investors who buy 10-year Treasuries today would only lose the income generated in the next year if yields rose to about 6%. The story also notes that a percentage-point increase in yields would result in a loss of less than 2% after a year whereas a one-point reduction would generate a return of about 13%.

If you're like Warren Buffett and dislike bonds, you may feel vindicated for sidestepping the current mess. But if you still want income to smooth returns in a bumpy market, here are 11 dividend stocks, including BP, Kraft Heinz, and Verizon, to consider. Barron's also recently featured the top-performing $23.3 billion Thornburg Investment Income Builder fund, which counts dividend-payers Citigroup and Kimberly-Clark among its largest holdings.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 30, 2026 12:35 ET (16:35 GMT)