All articles tagged with #long term bonds
Long-dated bonds are expected to face a challenging September, historically the worst month for such bonds, due to seasonal issuance, inflation concerns, political turmoil, and potential shifts in monetary policy, with global markets showing signs of increased volatility and risk.
Investors are rapidly withdrawing from long-term US bond funds due to concerns over rising US debt, inflation, and fiscal sustainability, marking the largest outflow since early 2020 and reflecting broader market jitters about the country's economic outlook.
The Federal Reserve is expected to lower interest rates, but the economy and stock market are already on an upward trajectory and may not need stimulation. Treasury Bills currently yield 2.5% more than historical average, while long-term bonds earn 0.5% less. Inflationary pressures from COVID spending could lead to an increase in long-term government bond yields and a potential debt spiral. If inflation increases, long-term bond yields will likely increase significantly, impacting the economy and government debt.
The bond sell-off continues as long-term US yields reach a 16-year high, causing market volatility. Investors are concerned about rising interest rates and the potential impact on the economy.
Municipal bonds are currently a favorable investment option, despite their lower yields compared to money-market funds. When considering tax benefits, the appeal of municipal bond yields increases. Additionally, it is a good time to invest in longer-term municipal bonds.