These are Schwab's top three income ideas for the rest of 2026

Investors can still enjoy solid yields in the bond market right now, but selectivity matters, according to Charles Schwab's mid-year outlook. The firm expects inflation to stay sticky and the Federal Reserve to remain patient. However, a rate hike seems a little bit more likely after the June Fed meeting and latest hot inflation report, said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research. As a result, the bond market's bumpy ride will likely continue, he said. In the Treasury market, the 10-year note yield will likely stay in the range of 4% to 4.5%, Martin noted. Bond yields move inversely to prices. However, he cautions there's a risk the yield could turn higher. Because of that, now is not the time to add duration, Martin said. Duration measures a bond's price sensitivity to interest rate fluctuations, and bonds with longer maturity dates tend to have greater duration. "They tend to be the most sensitive to interest rate changes, and we do see a risk that long-term interest rates stay elevated or even rise a little bit further from here," he said in an interview with CNBC. "More importantly, we don't think that investors are going to miss the opportunity to invest at the yields we're seeing right now." He sees three areas of opportunity for income investors in the second half of 2026. Investment-grade bonds Investment-grade corporate bonds offer high-quality income, with yields that average around 5%, Martin said. …