Fidelity's Timmer Doubts 60/40 Revival as Stock-Bond Correlation Slips

Fidelity's Jurrien Timmer said the stock-bond correlation remains positive because yields are elevated, undercutting hopes for a classic 60/40 portfolio revival. The shift matters because 60/40 returns depend on bonds hedging equity risk, a relationship that weakens when both assets move together. Timmer's view suggests allocators may need to reassess diversification assumptions rather than count on bonds to offset stock losses. Watch the direction of Treasury yields and the rolling stock-bond correlation for signs of whether the traditional hedge can reassert itself.