US Treasury yields fell; bond market saw positive returns

U.S. Treasury yields declined in the first quarter of 2025, leading to positive returns across the domestic bond market. This was driven by investors reducing economic expectations. The Federal Reserve held short-term rates steady after three cuts, citing uncertainty due to potential tariffs from the new administration. The 10-year Treasury yield fell nearly 60 basis points, and the broad investment-grade bond market returned 2.78%. The Columbia Bond Fund is selectively redeploying capital in credits less sensitive to trade disruptions, while also adding to its duration posture for risk balance. High-yield corporate bonds lagged investment-grade counterparts.