Interest rates rise as experts suggest bond investments

Central banks are expected to raise interest rates again, though experts suggest the current cycle will not mirror the dramatic shocks seen in 2022–2023. Nordea chief analyst Jan von Gerich noted that while Middle East conflicts are driving up energy prices and inflation, the current rate hike trajectory is more moderate, with forecasts suggesting a one percentage point increase compared to the four and a half percentage point rise seen previously.

In light of rising interest rates, strategists are advising investors to consider diversifying into fixed-income assets. eQ strategist Kirsi Martin suggests that investment-grade corporate bonds are currently attractive, offering yields around five percent with moderate default risk. Martin recommends using bond funds as an accessible way for individual investors to achieve diversification and mitigate risks associated with highly concentrated equity markets.