Bonds or stocks? Wall Street shares its preference — and how to invest

Should an investor go for bonds or stocks in the near to medium term? Both markets have been volatile recently, which could make it a difficult choice for traders. Stocks rallied after the U.S. Federal Reserve's decision to keep interest rates steady, but Fed Chair Jerome Powell stressed that the central bank hasn't begun considering a rate cut, and won't until inflation is under control. On the fixed income side, it's been a bad bond bear market this year.

It predicts that markets are seeing the end of the Fed tightening cycle, and expects the central bank to cut rates in the event of a recession. "In both instances, we expect that bonds on the short and long ends of the curve should eventually see some price appreciation." However, Wells Fargo's Wren said stocks are still preferable in the long term.

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