2019 was a baffling year for bonds. The 10-year U.S. Treasury yield fell to a three-year low, and the yield curve flashed ominous signals about the economic outlook. We’ve seen some improvement in long-term yields since the September low, but we don’t expect much more upside in 2020. However, bonds can still play an important role in helping to diversify portfolios where appropriate.

The Year in Review

One of our biggest challenges in 2019 was explaining the bond market’s baffling signals. Many firms—including ours—kicked off 2019 with expectations of rising rates after the Federal Reserve&rsquo

U.S. stocks rose this week, with the S&P 500 Index gaining for the ninth week out of the past ten. Stocks rallied late in the week in anticipation of a “phase one” trade deal with China and the removal of a tariff hike scheduled for December 15. A verbal agreement was reportedly reached on Friday. Investor sentiment was also lifted by United Kingdom (U.K.) election results and Federal Reserve (Fed) communications.

Economic data was mixed overall this week, though it is notable that the Fed characterized the U.S. economy in more upbeat terms. The core Consumer Price Index, excluding food and energy prices, grew a m

Boris Johnson is still the Prime Minister of the United Kingdom (U.K.) after the British public voted Thursday to give his Conservative party a clear victory.

After a contentious campaign dominated by the prospect of the U.K.’s withdrawal from the European Union (E.U.), or Brexit, the Conservatives gained a large majority of Members of Parliament (M.P.), campaigning to “get Brexit done,” beating out the opposition Labour Party, who advocated a second Brexit referendum.

This parliamentary majority for the Conservatives could signal an end to much of the gridlock that has occurred recently in the U.K.

The Federal Reserve (Fed) officially tied a bow on 2019 with another policy pivot.

On December 11, the Fed announced it would leave rates unchanged, concluding a string of three 25-basis point (0.25%) rate cuts from July to October.

Investors expected the Fed would leave rates unchanged after Fed Chair Jerome Powell clearly messaged the end of rate cuts at the previous meeting. What was more interesting, though, was policymakers’ rate projections, illustrated on the updated “dot plot.” As shown in the LPL Chart of the Day, policymakers now expect the fed funds rate to stay unchanged through the end