{"url":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/","section":"academy","title":"Inflation and rates: when bonds stop cushioning | ETFIQ","description":"Compare 2018 and 2022 across ETFIQ's benchmarks from 0% to 95% stocks, and see why bonds cushioned one fall and not the other. Real dated data.","as_of":"Nov 10, 2026","structured_data":[{"@type":"LearningResource","@id":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/#lesson","name":"Inflation and rates: when bonds stop cushioning","description":"In the calendar year to Dec 31, 2022, with prices up 6.45%, ETFIQ's US bond benchmark lost 13.07% and its 95% stock benchmark 17.73%, hypothetically.","url":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/","learningResourceType":"Lesson","teaches":"Why holding fewer stocks protects in some years and not others: the inflation and interest-rate regime decides whether bonds hold","educationalLevel":"Advanced","timeRequired":"PT7M","inLanguage":"en","isAccessibleForFree":true,"isPartOf":{"@type":"Course","@id":"https://etfiq.com/academy/planning-deep-dive/#course","name":"Planning Deep Dive","url":"https://etfiq.com/academy/planning-deep-dive/"},"position":4,"dateModified":"2026-11-10","author":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"},"publisher":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"}},{"@type":"FAQPage","@id":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/#check","mainEntity":[{"@type":"Question","name":"In which year did a lower stock share cut the loss the most?","acceptedAnswer":{"@type":"Answer","text":"2018. from 95% to 0% stocks the loss shrank 9.24 points in 2018 and 4.66 in 2022."}},{"@type":"Question","name":"Next year, inflation is high and rates rise fast. Based on 2022, what is likely for a 20% stock mix?","acceptedAnswer":{"@type":"Answer","text":"It can fall almost as much as a mostly stock mix. rising rates push bond prices down, so both parts can fall."}},{"@type":"Question","name":"A fund returns \u22125% in a year when prices rose 5%. Roughly what happened to its buying power?","acceptedAnswer":{"@type":"Answer","text":"About \u22129.5%. 0.95 \u00f7 1.05 = 0.905, about a 9.5% loss."}}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Academy","item":"https://etfiq.com/academy/"},{"@type":"ListItem","position":3,"name":"Planning Deep Dive","item":"https://etfiq.com/academy/planning-deep-dive/"},{"@type":"ListItem","position":4,"name":"Inflation and rates","item":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/"}]},{"@type":"WebPage","name":"Inflation and rates: when bonds stop cushioning","description":"Compare 2018 and 2022 across ETFIQ's benchmarks from 0% to 95% stocks, and see why bonds cushioned one fall and not the other. Real dated data.","url":"https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/","dateModified":"2026-11-10","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":5428,"truncated":false,"content":"ETFIQ / Academy / Planning Deep Dive / Inflation and rates \n \n Inflation and rates: when bonds stop cushioning\n Data as of Nov 10, 2026. Rebuilt every trading night.\n In the calendar year to Dec 31, 2022 , with prices up 6.45% , ETFIQ's US bond benchmark lost 13.07% and its 95% stock benchmark 17.73% , hypothetically.\n Planning Deep Dive \u00b7 Lesson 4 of 6 1 2 3 4 5 6 \n Pick an amount. See what 2018 and 2022 did to an all-bond mix and a 95% stock mix. Amount you have $100,000 On $100,000: US bonds, 2018 \u2212$9, US bonds, 2022 \u2212$13,070, 95% stocks, 2018 \u2212$9,250, 95% stocks, 2022 \u2212$17,727. Hypothetical amount. ETFIQ benchmarks, calendar years, applied to past prices before Oct 5, 2026. Step 1. The regime. Step 2. Returns by stock share. Step 3. How much did fewer stocks help? Take the gap between 95% and 0% stocks: 2018: \u22129.25% \u2212 ( \u22120.01% ) = 9.24 points . Bonds held, so cutting stocks cut the loss a lot. 2022: \u221217.73% \u2212 ( \u221213.07% ) = 4.66 points . Bonds fell too, so cutting stocks saved about half as much. Step 4. After inflation (2022). Divide each growth factor by the price growth, because rising prices shrink what every remaining dollar buys: US bonds: 0.8693 \u00f7 1.0645 = 0.8166 , a \u221218.34% loss of buying power 60% stocks: 0.8417 \u00f7 1.0645 = 0.7907 , a \u221220.93% loss \n The question\n \"I hold bonds so that when stocks fall, I'm cushioned. Does that always work?\"\n The idea\n It depends on the regime : whether inflation and interest rates are low and steady, or high and rising. When inflation is low and rates move little, bonds tend to hold their value while stocks fall. Fewer stocks, smaller loss.\n When inflation jumps and rates rise fast, bond prices fall too. When rates rise, new bonds pay more, so older bonds paying less sell for less ( Bonds for income ). Then stocks and bonds can fall together .\n \n Inflation also shrinks what any return buys ( Inflation and real return ).\n Worked example\n The 4 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.\n We'll compare two years when stocks fell, across ETFIQ's benchmarks from 0% to 95% stocks. Every return is a calendar year from the benchmark pages, prices to Nov 10, 2026 , and hypothetical (each rule applied to past prices). Inflation is the change in the US consumer price index, December to December.\n 2018 2022 \n Prices rose (inflation) 1.91% 6.45% \n 10-year Treasury yield, start to end 2.40% to 2.69% 1.52% to 3.88% \n Stock share 2018 2022 \n 0% (US bonds) \u22120.01% \u221213.07% \n 20% \u22121.87% \u221213.92% \n 40% \u22123.78% \u221214.84% \n 60% \u22125.74% \u221215.83% \n 80% \u22127.73% \u221216.89% \n 95% \u22129.25% \u221217.73% \n So in 2022 the all-bond mix lost almost as much buying power as the 60% mix.\n A low-stock mix protects best when bonds hold, and that depends on inflation and rates. \n The common mistake\n \"A bond loss of 13% means I lost 13% .\" The statement shows dollars, not what they buy. In 2022, US bonds lost 13.07% in dollars and 18.34% in buying power, because prices rose 6.45% the same year. In a high-inflation year, judge every return after inflation.\n Check your understanding\n Pick an answer to see why. Two of three right passes the lesson.\n 1. In which year did a lower stock share cut the loss the most? A 2018 B 2022 C Both the same D Neither Answer: A. 2018. from 95% to 0% stocks the loss shrank 9.24 points in 2018 and 4.66 in 2022. Not B: in 2022 bonds fell too, so swapping stocks for bonds saved less. 2. Next year, inflation is high and rates rise fast. Based on 2022, what is likely for a 20% stock mix? A It can't lose money B It rises while stocks fall C It can fall almost as much as a mostly stock mix D It always beats inflation Answer: C. It can fall almost as much as a mostly stock mix. rising rates push bond prices down, so both parts can fall. Not A: in 2022 the 20% mix lost 13.92% . 3. A fund returns \u22125% in a year when prices rose 5%. Roughly what happened to its buying power? A \u22125% B About \u22129.5% C 0% D +5% Answer: B. About \u22129.5%. 0.95 \u00f7 1.05 = 0.905, about a 9.5% loss. Not A: that ignores the rise in prices. \n Takeaways\n Bonds cushion a stock fall best when inflation is low and rates are steady. \n When rates rise fast, stocks and bonds can fall together, and stock share matters less. \n Compare any year across ETFIQ's benchmarks, and read it after inflation. \n Do it on ETFIQ\n See every stock share's worst years \n Where to next\n Next lesson: Evaluating a fund: fee, benchmark and promise Previous lesson: Concentration: see what you already own Planning Deep Dive: all lessons The explainer behind this lesson ETFIQ Academy How ETFIQ computes these numbers \n Cite this page. ETFIQ, Inflation and rates: when bonds stop cushioning, data as of Nov 10, 2026. https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/ Free to use with attribution for data ETFIQ computes; issuer data stays under its owner's terms. The underlying files are at Open data .\n Other forms Plain ETFIQ, Inflation and rates: when bonds stop cushioning, data as of Nov 10, 2026. https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/ APA ETFIQ. (Nov 10, 2026). Inflation and rates: when bonds stop cushioning. Retrieved from https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/ Markdown [Inflation and rates: when bonds stop cushioning (ETFIQ, Nov 10, 2026)](https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/)","source":"ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.","publisher":{"@id":"https://etfiq.com/#org","name":"ETFIQ","url":"https://etfiq.com"},"license":"https://etfiq.com/license/","license_text":"Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.","citation":"ETFIQ, Inflation and rates: when bonds stop cushioning, data as of Nov 10, 2026. https://etfiq.com/academy/planning-deep-dive/inflation-and-rate-regimes/"}