Category Archives: Bonds

Series I Savings Bonds Update

Market Minute

October 2022 – Scott Rosenquist, CFA®

U.S. Treasury Series I Bonds will reset their interest rate next month leaving investors until the end of October to earn 9.62% for the following six months. The rate applied to I bonds is based on the month it was issued and will change every six months going forward. The current rate is attractive relative to other short-term savings options. As of now, estimates for the new interest rate appear lower than 9.62% but we will see in early November. The fixed rate component is currently zero, so the entire interest rate is based on the inflation component.

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Bond Market Update

Market Minute

September 2022 – By Scott Rosenquist, CFA®

Yields across the treasury market have continued to rise this year as the Federal Reserve maintains its aggressive rate hiking plan to combat inflation.  The rise in yields has delivered negative returns for fixed income investors across the bond market, with the broad index down double digits for the year.  This dynamic has hurt broadly diversified portfolios that rely on the fixed income portion to offer ballast to equity exposure. 

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Bond Market Update

Market Minute

April 2022 – Scott Rosenquist, CFA®

The bond market had its worst quarterly return in decades, down 6% as bond yields rose during the quarter and the Federal Reserve sharpened its focus on inflation. Bond prices move inversely with yields. The unemployment rate now at 3.6%, is near pre-pandemic levels but inflation continues to stay stubbornly elevated. The Federal Reserve raised interest rates by a quarter percentage point after its March meeting, the first-rate increase since 2018, and signaled six more increases for the year. As the Federal Reserve’s plans for fighting inflation became clearer, the bond market responded by quickly adjusting yields higher across the entire curve.

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Series I Savings Bond

Market Minute

December 2021 – Scott Rosenquist, CFA®

Investors continue to search for yield as interest rates remain low and inflation remains high. One place to look is directly from the U.S. Treasury with the Series I Savings bond. The I bond is a savings bond issued by the U.S. Treasury that offers inflation protection. Investors have to purchase I bonds from the U.S. Treasury since they are not marketable securities and do not trade like other bonds issued by the Treasury. The interest rate on an I bond is adjusted twice a year (May and November) based on the Consumer Price Index (CPI). The rate announced last month was 7.12% and applies to bonds bought between November of this year through April 2022. This is attractive relative to other savings alternatives from banks such as certificates of deposit and savings accounts.

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