Fixed-Income Asset Allocation Strategy in a Fed Rate-Cut Cycle

Macro Background

The Federal Reserve began its rate-cutting cycle in September 2024. By mid-2026, the federal funds rate had fallen from 5.25–5.50% to 4.00–4.25%. In this context, fixed-income products that lock in current rates carry significant strategic value.

RWA Tokenization Strategy

By tokenizing short-term U.S. Treasuries and investment-grade bonds, investors can lock in current high yields while enjoying the liquidity advantages of on-chain assets. This strategy is particularly suitable for investors seeking stable returns in a rate-cutting environment.

Portfolio Construction

We recommend allocating 40–60% of fixed-income exposure to tokenized U.S. Treasuries, 20–30% to tokenized investment-grade corporate bonds, and 10–20% to high-yield private credit tokens to build a counter-cyclical fixed-income portfolio.

Risk Considerations

The main risks include smart contract risk, custodian risk, and liquidity risk. It is recommended to choose platforms with licensed custody and on-chain reserve verification to mitigate these risks.