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While 2025 has witnessed a bull market for most bonds, concerns about the booming trillion-dollar private credit market surfaced in October as several businesses like subprime auto lender Tricolor Holdings and auto-parts supplier First Brands both filed for bankruptcy. The filings provided hard evidence that many sectors of the economy are struggling, and JPMorgan Chase CEO Jamie Dimon warned there were likely to be“ more cockroaches” out there.
He isn’ t alone. In the October webcast, Gundlach said it was a virtual certainty that private credit would be the epicenter of the next financial disruption or crisis.“ Nothing else is close,” he said.
Another persistent threat to fixed-income investors is the duration trade— the risk of owning long-term Treasurys and other securities with extended maturities. People have been wringing their hands about unsustainable U. S. budget deficits since the 1980s, but federal debt has recently been rising at almost $ 2 trillion a year and has surpassed 100 % of GDP while a dysfunctional Congress isn’ t even trying to address it.
In a recent book called Coming Into View: How AI And Other Megatrends Will Shape Your Investments, Vanguard’ s Davis raised the possibility that if the U. S. is unable to control its chronic budget deficits, the yields on 30-year Treasurys could soar to levels as high as 7 % to 9 %. But long-term Treasurys with 20- to 30- year maturities represent less than 5 % of total Treasury issuance, so the impact on government financing might not be so severe and Davis said that scenario remains an outlier.
If there is a bright side to this picture, it’ s that the Treasury has predominantly sold short-term bonds of less than three years since the pandemic. That means the government’ s near-future debt servicing costs could be modestly lower, since most of the debt it will refinance in the next few years probably will be priced at either the same rates or lower rates than the yields on Treasury bonds sold from mid-2022 through 2024.
Some advisors might be surprised at the extent to which the AI boom is driving the thinking among fixed-income professionals. Rosenberg, who often takes a bearish perspective, says that“ an outright recession is a tough call even for me to make, considering that the peak positive impact on GDP growth from the Big Beautiful Bill lands in 2026.”
He adds:“ The critical question will then be how much more of an AI capex thrust there will be since, outside of that, the pace of overall economic activity has stagnated so far this year.”
What could derail the AI data center boom? More inexpensive, energy-efficient AI platforms out of China like DeepSeek? Or is it the possibility that AI isn’ t the revolution its advocates are claiming?
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or about 9.4 % of the average benefit. Next year, that premium will rise another 11.5 % to $ 206.50.
As Medicare turns 60 next year, its cost trajectory is sobering. The Part B premium has increased from $ 3 to $ 206.50— roughly doubling every decade since its inception. Meanwhile, the average Social Security check in August 2025 was about $ 2,000. With the anticipated 2.7 % COLA increase, recipients will see about $ 54 more per month— but the $ 21.50 rise in the Part B premium will consume nearly 40 % of that increase.
And that’ s just one component of healthcare spending. Retirees also face rising costs for prescription drug coverage( Part D), Medigap policies, and outof-pocket expenses. For higher-income retirees, there’ s another layer of financial pressure— the additional charge for Medicare Part B and Part D premiums for those whose modified adjusted gross income exceeds certain thresholds, the adjustment known as the income-related monthly adjustment amount( or“ IRMAA.”)
While this adjustment is designed to make sure higher-income retirees contribute more to the Medicare system, the thresholds have not kept pace with inflation. As a result, many middle-income retirees are being swept into IR- MAA brackets that were once reserved for the wealthy.
In 2025, these surcharges can add anywhere from roughly $ 70 to more than $ 400 per month per person. For a married couple, that can mean an additional $ 1,000 or more deducted from their combined Social Security benefits each month. Even modest increases in investment income, capital gains, or required minimum distributions can trigger higher IRMAA tiers— often erasing most, if not all, of the annual cost-of-living increase that retirees look forward to each fall.
For many, the frustration is twofold: the Social Security COLA is meant to protect recipients against inflation, yet the inflation in healthcare costs— and the structure of the premium adjustments— undermines that protection. As healthcare spending absorbs a growing share of benefits, retirees are effectively falling behind even as their nominal income rises.
The bottom line is that Social Security remains one of the most successful anti-poverty programs in U. S. history, but the program’ s purchasing power is being eroded from within. Without meaningful reform to Medicare’ s cost structure and IRMAA thresholds, retirees will continue to see their cost-of-living adjustment increases consumed not by discretionary spending but by the rising cost of staying healthy.
TRAVIS STANLEY, IRMAA Certified Planner, is president of National Social Security Advisors( NSSA).
58 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2025 WWW. FA-MAG. COM