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fixed income investing

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I Bonds vs Treasury Bonds: Which One Should You Buy?

With the Federal Reserve cutting rates from 4.33% in early 2025 to 3.64% as of January 2026, fixed-income investors face a shifting landscape. Two of the most popular government-backed options — Series I Savings Bonds and marketable Treasury securities — offer fundamentally different value propositions. Understanding the distinction has never been more important as inflation moderates and yields adjust. I Bonds currently average a 4.213% composite rate, while 10-year Treasury notes yield 4.02% and 2-year notes sit at 3.42%. Both are backed by the full faith and credit of the U.S. government, but they differ sharply in liquidity, purchase limits, inflation protection, and how they fit into a broader portfolio. This guide breaks down each instrument with current data so you can make an informed allocation decision. Whether you are building a conservative income portfolio, hedging against inflation, or simply looking for a safe place to park cash, the choice between I Bonds and Treasuries depends on your time horizon, how much you want to invest, and how you weigh inflation risk against interest rate risk.

I BondsTreasury bondssavings bonds

Treasuries: Rally Accelerates as 10-Year Yield Breaks Below

The U.S. Treasury market is experiencing its most sustained rally since late 2025, with the benchmark 10-year yield falling to 4.03% on February 23 — its lowest level in nearly three months and a sharp decline from the 4.29% levels seen at the start of the month. The move has been driven by a confluence of softening economic data, renewed tariff uncertainty, and a broad flight to safety that has seen investors rotate out of risk assets and into government bonds. The rally has been particularly pronounced across the long end of the curve. The 30-year Treasury yield has retreated from 4.91% in early February to 4.70%, while the 2-year note — more sensitive to Federal Reserve policy expectations — has drifted lower to 3.43% from 3.57%, reflecting growing market conviction that the Fed's easing cycle still has room to run. Mortgage rates have followed Treasury yields lower, with the 30-year fixed rate dipping below 6% for the first time since 2022, a development that could reinvigorate the housing market heading into spring. The backdrop is one of rising macroeconomic anxiety. JPMorgan CEO Jamie Dimon warned investors this week that elevated asset prices are adding to economic risks, drawing uncomfortable parallels to the pre-2008 era. With the effective federal funds rate at 3.64% — reflecting 169 basis points of cumulative cuts since the September 2024 peak of 5.33% — the market is now pricing in a careful balance between lingering inflation concerns and mounting evidence of economic deceleration.

US Treasury yields10-year TreasuryFederal Reserve rate cuts

Treasuries: The Yield Curve Has Normalized After Two Years

After spending more than two years inverted — the longest stretch in modern history — the US Treasury yield curve has decisively normalized. The <a href="/posts/2026-02-25/treasuries-rally-accelerates-as-10-year-yield-breaks-below-405-on-growth-fears-and-flight-to-safety">10-year Treasury</a> yield stood at 4.02% on February 26, 2026, while the 2-year note yielded 3.42%, producing a positive spread of 60 basis points. That gap has narrowed from 74 basis points earlier in the month, but the broader story remains: the curve is no longer flashing the recession warning that dominated bond market commentary from mid-2022 through most of 2025. The normalization has been driven by the Federal Reserve's rate-cutting campaign. After holding the federal funds rate at 4.33% for five consecutive months through July 2025, the Fed began easing in the autumn, bringing the rate down to 3.64% by January 2026 — a cumulative 69 basis points of cuts. Short-term Treasury yields have followed the policy rate lower, while long-term yields have declined more gradually, reflecting persistent fiscal concerns and inflation expectations that remain above the Fed's 2% target. For bond investors, this represents a meaningful shift in the opportunity set. The days of earning higher yields on short-term bills than long-term bonds are over. The question now is whether the normalization signals that the recession the inverted curve was supposedly predicting has been avoided entirely — or is merely delayed.

treasury yieldsyield curvefederal reserve rate cuts