Category Archives: Bonds

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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