This past weekend, I was on a rugged Ozarks trail with my family. About halfway through our hike, we came to a fork in the path—one side looked smooth and easy, the other steep and along the river. My daughter wanted to take the easy way. My son, the adventurous one, wanted to see what was up the river trail. My wife, weighing the options herself, relied on me to make the best decision. No apparent signs, no map; just instinct, experience, and a bit of faith.
It struck me how much this moment mirrors the decision facing investors right now. Wall Street is at a crossroads—and it’s not a gentle fork in a well-worn trail. It’s more like a foggy intersection at the edge of a cliff. For decades, when markets stumbled, investors found safe footing in U.S. Treasurys. Stocks dipped, the government stepped in, and portfolios eventually bounced back. The Fed was there with its metaphorical hiking map, guiding investors through uncertainty. But today, the terrain is different. And the path forward is far less clear.
The “Risk-Free” Trail Is Anything But
U.S. Treasury yields—the so-called “risk-free” rate—are climbing fast. That might sound good for savers, but it’s a red flag for markets. Investors usually flee to bonds during rocky times, pushing yields down. But today, concerns about inflation, economic stagnation, and geopolitical shifts (like Trump’s aggressive new tariff agenda) are causing a selloff in 30-year bonds, driving yields up to levels we haven’t seen since the pandemic crash. This shift is creating a harsh reality: fewer and fewer safe places to hide.
Credit Market Warning Signs
High-yield bonds, or “junk bonds,” are flashing danger signals. The demand for protection—measured through put options tied to junk bond ETFs—is at record highs. It’s the market’s way of saying, “We don’t know what’s around the bend, but we don’t like it.”
At the same time, loan ETFs that were popular during the rate hike cycle are seeing massive outflows. Some of the most significant withdrawals in history happened just days ago and leveraged loan funds—once promising tools for yield—are quietly slipping lower. That’s not typical market noise; that’s a chill settling in.
The Fed’s Not Coming (At Least, Not Yet)
Here’s the real kicker: in the past, selloffs were often met with swift government action—stimulus checks, interest rate cuts, liquidity injections. Today, the very policies driving volatility are coming from Washington. Tariffs, most notably, are throwing off the rhythm investors have danced to for decades. The old rulebook—”Buy the dip, the Fed’s got our back”—no longer applies. Investors banking on another save may be left waiting at the trailhead.
So, What’s the Right Path?
That brings me back to our hike. We ended up taking the river path. It wasn’t easy—muddy in places, a few scrapes along the way—but the view made it all worthwhile. More importantly, we didn’t choose that path because it was a sure thing. We chose it because, after weighing the risks and our goals, it aligned with the experience we were looking for.
Investing today requires the same mindset. The road ahead may be steeper and more volatile than usual, but that doesn’t mean we abandon the journey. It means we plan carefully, lean into diversification, and stay nimble.
Bottom Line
We’re at a pivotal moment in the market. Treasury yields are sending signals. Credit markets are uneasy. Liquidity is thinning. Tariffs are rewriting the rules. And the safety nets of the past may not be there this time.
Investors, like hikers, must decide: stick to the well-worn trail that no longer guarantees safety—or adapt to the new terrain with discipline, guidance, and a long-term view. If you’re unsure which path to take, maybe it’s time for a new kind of trail guide—one that can help you navigate today’s unfamiliar financial landscape with confidence.
Have a blessed week!
Joe Shearrer
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly.
The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.
Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.
Sources: