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Credit Insights

2Q Fixed-Income Index Overview

Falling interest rates drive further gains.

Bond prices rose during the second quarter, spurred by the decline in interest rates across the entire yield curve. The Morningstar Core Bond Index, our broadest measure of the fixed-income universe, rose 2.92% in the second quarter. Underlying the Core Bond Index, the Short-Term Core Bond Index increased 1.67%, the Intermediate Core Bond Index rose 2.21%, and the Long-Term Core Bond Index surged 5.64% this past quarter. In the Treasury market, the Morningstar U.S. Government Bond Index increased 2.92%, and in the agency market, the Morningstar Agency Bond Index rose 2.52%. Even though inflation expectations dwindled over the past three months, the Morningstar TIPS Index gained 2.81%.