"Historically, an inverted yield curve has been viewed as an indicator of a pending economic recession. When short-term interest rates exceed long-term rates, market sentiment suggests that the long-term outlook is poor and that the yields offered by long-term fixed income will continue to fall." - Investopedia
Rising Fed Funds rate and rising inflation has impacted bond funds or balanced funds like Vanguards Target Retirement Fund (ticker: VTINX).
There was a 24% drop from VTINX's 52 week high (Nov 2021) to its 52 week low (Oct 2022).
VTINX is 70% government / investment grade bonds and 30% in stocks (Wilshire 5000 and an International stock market index fund).
Also Vanguard Total Bond Market ETF is down 16.6% for the year as of 24 October. This is its worst performance since its inception in 2007. Its second worst was -2.11% for 2013.
"Historically, an inverted yield curve has been viewed as an indicator of a pending economic recession. When short-term interest rates exceed long-term rates, market sentiment suggests that the long-term outlook is poor and that the yields offered by long-term fixed income will continue to fall." - Investopedia