Huber Senior Advisors have published the 2025 outlook for the US bond market, highlighting the anticipated impact of a significant increase in fiscal spending on infrastructure under the new Trump administration.

Citing Mr. Trump’s commitment to revitalizing America's infrastructure, Huber Management foresees a robust environment for bonds, driven by increased government spending on large-scale public projects. This anticipated fiscal policy is expected to support economic growth, influencing both Treasury yields and corporate bond issuances.

Government bonds and interest rates

The firm anticipates that the substantial infrastructure investment will lead to an uptick in government borrowing, likely exerting upward pressure on Treasury yields and, by extension, a softening of bond prices which move inversely to yields. This scenario presents opportunities for investors to capitalize on higher yields in government securities, despite the potential for increased market volatility.

“Higher fiscal spending typically results in an increased supply of government bonds, which could lead to rising yields,” said Bernard Huber, Huber Management’s Chief Executive Officer. “This creates an advantageous environment for bond investors, particularly those focused on long-term holdings.”

Corporate bond market dynamics

The corporate bond market is expected to thrive as companies in the infrastructure sector seek to raise capital for new projects. Huber Management predicts a rise in corporate bond issuances, with particularly strong performance in sectors like construction, transportation, and utilities.

“We anticipate a dynamic corporate bond market in 2025, bolstered by the need for infrastructure financing,” noted Mr. Huber. “Investors can expect a range of opportunities, especially in bonds issued by companies with direct involvement in government-funded projects.”

Strategic investment approach

In light of these developments, Huber Management is recommending a strategic allocation that includes both government and corporate bonds to balance potential risks and rewards. The firm emphasizes the importance of diversification, advising clients to maintain a mix of high-quality issuances to mitigate interest rate and credit risks.

Outlook for bond investors

Huber Management remains optimistic about the bond market’s prospects in 2025. With fiscal policy set to play a crucial role in shaping economic conditions, the firm believes that bond investors are well-positioned to benefit from the resulting market dynamics.

If you are interested in investing in one of our exciting and lucrative opportunities please use the following steps:

• Open a Huber Management account and become a valued client or log-in if you are already a client.
• Speak to an advisor about your investment objectives and requirements
• Choose from multiple investment vehicles that are tailored to your own specific investment objective.

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