While bond yields have risen sharply lately, fund flows into bonds tell two very different stories.
As the Federal Reserve signals it will keep interest rates higher for longer, the market appears to be reflecting the uncertainty about the path of policy going forward.
Advisors have choices to face with their fixed income allocation. Should they take on credit risk to be rewarded with a high level of income? What about taking on interest-rate risk and owning longer-duration bonds?
What everyone wants to know now is how much further the selloff will go and how long it will last. I can venture a few educated guesses based on history.
Even as stocks rallied back during the monetary panic last week, big disruptions in the world of Treasuries threaten fresh pain for a host of hedging strategies on Wall Street.
Professional stock investors know little about bonds and vice versa I suppose. Yours truly has to be included in that mix but that doesn’t stop me from trying.
When the media speaks of the yield curve, they are likely referring to the Treasury yield curve. It is the point of reference for interest rate levels and investment comparison.
Bond investors are coalescing around a segment of the Treasuries market that offers a measure of protection from this year’s brutal rout and also positions them for the recession that some still anticipate.
Goldman Sachs Group Inc. economists said the surge in US Treasury yields to historically high levels over the last several weeks will crimp economic growth and sow financial risks, though the bank is still not calling for a recession.
Bill Bengen has continued his groundbreaking research into retirement strategies. He has developed a framework for retirees to monitor and adjust withdrawals based on inflation and market performance.
Global central bank hiking cycles have dominated financial market headlines for the last 18 months, keeping many investors on the sidelines, hiding out in cash as inflation and the resulting rate hikes were serious headwinds to returns.
Higher interest rates aren’t just a thorn in the side of prospective residential real estate buyers and owners. Additionally, commercial real estate is feeling the pangs of a high-rate environment. That could bring out more bears in the sector.
The U.S. Treasury yield curve is currently inverted, with yields on short-term bonds higher than yields on longer-term bonds. Some expect this to unwind with short-term bond yields falling faster than longer-term yields. Amid these expectations, those investors are wondering if they should consider reallocating to shorter-term bonds.
Savvy investors are aware that geopolitical tensions and uncertainty can significantly influence the financial markets.
Following last year’s calamity in the bond market, it’s not surprising that advisors and investors are looking for new avenues through which to source income. That search is leading many market participants to options-based exchange traded funds, including covered call ETFs.
Corporate defaults and bankruptcies are on the rise, but we don't believe it should be a concern for investors who hold highly rated corporate bond investments, like those with investment-grade ratings.
With yield curves still inverted, a short-dated high-yield strategy continues to make sense for return-seeking investors with a defensive mindset.
The US economy has been more resilient than many pundits had anticipated over the past year—but can this resilience continue? Stephen Dover, Head of Franklin Templeton Institute, recently hosted a discussion with economists from across our firm to explore where the risks and opportunities for investors lie today and into year-end.
The bond market’s selloff accelerated after a surge in US hiring raised expectations that the Federal Reserve will need to raise interest rates again this year.
As heightened inflation has lingered, the Federal Reserve diminished hopes of 2024 interest rate cuts and economic data suggests a mild recession in the first half of 2024.
For the past 18 months, Federal Reserve Chair Jerome Powell has frantically been trying to break Americans' borrow-and-spend habits. It’s critical to his fight against inflation.
US employment unexpectedly surged in September by the most since the start of the year, illustrating a durable labor market and bolstering the case for another Federal Reserve interest-rate hike.
We believe the US economy is late in the credit cycle as US Treasury bond yields move to highs not seen since 2007.
How long can the #economy stomach higher rates and avoid any major damage? In this month’s newsletter, we dive into why cuts need to happen soon, the fallout if they don’t, and how investors can position portfolios heading into year end.
Bill Gross is right: bond ETF activity has been frenzied in the grip of Wall Street turmoil.
Emerging-market currencies erased their Friday gains and were poised for a third week of declines as a stronger-than-expected US jobs report underscored global interest rates could remain higher for longer.
Not so long ago, families, businesses and governments were effectively living in a world of free money.
Expectations of "higher for longer" U.S. interest rates has helped drive the dollar's recent rally.
More than two years and over 500 basis points later, the Federal Reserve (the “Fed”) has executed one of its most aggressive monetary policy moves in decades, bringing the Federal Funds rate (the rate that banks charge each other to borrow or lend excess reserves overnight) to a current target range of 5.25%-5.5%.
Economists, policymakers and politicians are used to there being two variables that serve as a scorecard for how the public feels about the economy — unemployment and inflation. A year ago, when inflation was at 40-year highs, public unhappiness made sense.
For the last 40 years, interest rates have gone pretty much one way: down. In the last 18 months, however, rates have crept up, and many are worried they will stay high.
Losses on longer-dated Treasuries are beginning to rival some of the most notorious market meltdowns in US history.
There are compelling arguments that interest rates will remain low rather than rise.
The Federal Reserve may be putting its hoped-for soft landing of the economy at risk by tacitly accepting a run-up in long-term interest rates to the highest levels since 2007.
Emerging markets (EM) bulls may have to continue playing the waiting game after a rough end to the third quarter. Thankfully, leveraged exchange traded funds (ETFs) can keep traders in the game.
Good news for bond investors: yields are likely to stay higher for longer. We share strategies for making the most of this environment.
The Fed’s “soft landing” hopes are likely overly optimistic. Such was the context of the recent #BullBearReport, which discussed the long record of the Fed’s economic growth projections.
If you go to a financial adviser to chat about investments, here’s how your first meeting will probably go: They will ask you about your attitude to risk. How much money are you prepared to lose?
The queue of soothsayers warning of impending doom is lengthening; growing concern about US domestic politics as well as the global economic backdrop risks sparking a full-blown market rout.
It’s getting bleak for equity bulls hoping for a reprieve from the US stock market’s “higher-for-longer” tantrum.
As global financial markets reel under the possibility of 5% benchmark Treasury yields, the question on investors’ minds: how much worse could it get?
Rising rates in the second half of the year have brought year-to-date returns for the US Aggregate (“Agg”) benchmark index negative.
Gold and silver prices slid lower to close out the third quarter. Entering trading for the fourth quarter, the metals are back, once again, in the middle of the range where they have languished for more than three years.
Inflation has declined considerably from last year’s peak of ~9.0% to ~3.7%. However, policymakers still think they have more work to do and have signaled that one additional rate hike is likely.
Real estate investors need to allocate considerably more resources to climate-proofing old buildings rather than erecting new structures, to keep up with net zero regulations and avoid being saddled with stranded assets.
A pair of Wall Street’s most prominent US equity strategists are at odds about whether stocks can extend this year’s rally against the reality that interest rates will remain higher for longer.
Money-management firms launched new exchange-traded funds at a rapid pace last month, shaking off fears that the $7 trillion industry is already overrun with low-cost investment vehicles.
Certificates of deposit (CDs) and Treasuries both can offer steady, predictable investment income—but how to decide between them? Here are five factors to help you choose.
Public credit markets offer high quality investments with attractive yields and downside resilience, while we see growing longer-term opportunities in private markets.
“Compound market returns.” During bullish markets, there is inevitably a regurgitation of this myth that was contrived to extract capital from retail investors and place it in the hands of Wall Street.
