Annuity sales hit record $123.9B as Fed hawks reshape fixed income

Total U.S. annuity sales hit $123.9 billion in the second quarter, a 4% gain from a year earlier and the best result LIMRA has recorded in its U.S. Individual Annuity Sales Survey, according to preliminary figures released last week and reported by InvestmentNews. That is the 11th consecutive quarter above $100 billion, and first-half volume reached $231.3 billion, a record for the period.

The fixed-income backdrop did the lifting. At its late-July meeting, the Federal Open Market Committee voted 9 to 3 to hold rates steady, but the dissent moved markets more than the decision did. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan each wanted an immediate 25-basis-point hike. InvestmentNews notes it was the first time since September 2016 that three FOMC members dissented with a unified hawkish view.

Geopolitics added the second pressure. The conflict involving Iran is five months old, and Treasury Secretary Scott Bessent told CNBC that a deal to reopen the Strait of Hormuz “is in sight,” after President Trump called the latest round of talks Iran’s “last chance.” Bessent’s comments helped reverse an earlier spike in oil prices, a reminder of how quickly inflation expectations can move.

Bryan Hodgens, LIMRA’s head of research, credited “global tensions, market volatility and rising interest rates” with lifting demand across every major product category. It is exactly the combination that pushes retirement savers toward income guarantees.

Registered index-linked annuities are where the growth sits. Second-quarter RILA sales hit $23.3 billion, up 11% from the first quarter and 22% from a year earlier. Year-to-date RILA volume came to $44.4 billion, 21% ahead of the same period in 2025. June was the product’s second-highest sales month on record, up 15% from May and more than 30% from June 2025.

Carriers are putting more distribution behind the category, according to LIMRA’s data, and the run of records suggests RILAs have moved past their earlier niche status. The structures sell a position between straight indexed annuities and variable products, and advisers are treating them as a core shelf item rather than an experiment.

The third quarter will test whether demand holds once the macro news shifts. A Hormuz deal would likely ease oil prices; the three Fed dissenters want immediate tightening. Either result will tell advisers whether the record reflects the moment or a structural shift in how retirement income is built.