US investors rethink bonds' role as inflation reshapes portfolios

US investors are reducing bond allocations, with fixed income's share of portfolios falling to 20.3 percent from 25.7 percent in 2016, the lowest since May 2008, according to Morningstar data. The Federal Reserve has held rates steady at 3.50 to 3.75 percent, while the 10-year yield hovers around 4.6 percent and the 30-year around 5.1 percent. Investors are shifting toward commodities, infrastructure, private credit, and real assets, with State Street reporting broad commodities returns of 23.2 percent year-to-date through May 31 versus flat US Treasuries.