Bond Yields Fall on Fed Optimism

November 19, 2018

Bond Yields Fall on Fed Optimism Photo

Last week, interest rates fell in the U.S. as traders became more optimistic that the Federal Reserve (Fed) may not increase rates as much as indicated last month. The Fed speakers changed their tone, focusing on the need to be “data dependent” based on the most up-to-date economic information.

The stock market and global growth will be the two wildcards for the Fed over the coming months. I continue to expect challenges for risk assets as we conclude 2018. Treasury bonds remain the go-to asset class in any type of flight to quality trade.

Wishing everyone a healthy and happy Thanksgiving!

Tags: Federal Reserve | Interest Rates | Treasury bonds

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High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.

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