After years where “cash yielded nothing”, 2025 looks different. Short-term Treasuries offer a meaningful yield again, which changes the opportunity cost of holding cash and the role bonds can play in a portfolio — especially for investors who care about cash flow and drawdown control.
Key answer: fixed income matters again because it can fund your plan (and your patience) without taking equity-like risk.
Data & charts: T-bill line items (as of 2025-12-18)
From the Federal Reserve H.15 release (Treasury bills, secondary market):
| Tenor | Yield | Date | Source |
|---|---|---|---|
| 4-week | 3.56% | 2025-12-18 | Federal Reserve (H.15) |
| 3-month | 3.53% | 2025-12-18 | Federal Reserve (H.15) |
| 6-month | 3.48% | 2025-12-18 | Federal Reserve (H.15) |
H.15 Treasury bills (secondary market): 4-week, 3-month, 6-month.
What “bonds are back” actually means
It doesn’t mean “bonds will outperform stocks.” It means:
- the cash buffer can earn something,
- the hurdle rate for risky assets is higher,
- you can structure a plan where you don’t have to sell equities in a bad year.
Duration risk in one paragraph
Short-term bills mostly give you yield with limited price sensitivity. Longer bonds add duration risk: prices move more when yields move. That’s not automatically bad — it’s just a different instrument with different use cases.
Where fixed income fits for individuals
Three common roles:
- Emergency fund / cash buffer: stable, liquid, plan-protecting.
- Bridge capital: money you need in 1–5 years (home purchase, tuition, relocation).
- Drawdown management: reduces forced selling in early retirement plans.
Next steps
- Size your buffer in the Emergency Fund calculator (so “cash” becomes a number, not a feeling).
- Compare a bond-heavy vs equity-heavy plan in the FIRE calculator.
- If your goal is dividend income, model the hybrid (dividends + cash buffer) in the portfolio calculator.
Summary
- In 2025, short-term yields make fixed income relevant again.
- H.15 (Dec 18, 2025): 4-week 3.56%, 3-month 3.53%, 6-month 3.48.
- Bills are a yield tool; longer bonds add duration risk (price sensitivity).
- Fixed income often helps more through behavior and drawdown control than through “beating stocks”.
- Treat bonds as part of your plan architecture, not just an asset class.