Insights + Resources

Long-Term Interest Rates Are Creeping Higher

Nov 13, 2020

Long Term Interest Rates Creeping Higher
What’s fueling the rally?

With all the election chatter and stock market volatility, it may have been easy to miss the ongoing uptrend in long-term interest rates.

The yield on the 10-year Treasury bond is sitting just below 1%. Just a few short months ago, the 10-year was yielding roughly 0.5%.1

What’s fueling the rally? More demand for money, which is the result of a pickup in economic activity. When businesses see economic conditions improving, they look to expand their operations. When entrepreneurs see exciting new opportunities, they look to raise money to finance their projects.2

By contrast, a weaker economy tends to promote a “flight to quality,” which increases the demand for treasuries and drives yields lower.3

Will interest rates continue to go higher? That’s uncertain. Rates fluctuate, and there’s a possibility that long-term interest rates may reverse course and start to trend lower. A lot will depend on business confidence in the months ahead.

With interest rates ticking higher, some people may wonder if it’s an opportunity to boost bonds’ exposure to capture the higher rates. It’s a good thought, but you can consider many factors before boosting the bond portion of an allocation model, including the outlook for inflation, the dollar, and other macroeconomic factors.

For additional insights and resources, be sure to sign up for our Weekly Market Commentary, follow our YouTube channel where we regularly post our Epic Market Minute videos, follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.

Tags: , ,

More Insights

A 6.1% Bump in Social Security?
Jul 22, 2021

The news keeps getting better for Social Security recipients. It’s now projected that benefits will increase 6.1% in 2022, up from the 4.7% forecast just two months ago. That would be the most significant increase since 1983.1,2

Coping with an Inheritance
Jul 21, 2021

Inheriting wealth can be a burden and a blessing. Even if you have an inclination that a family member may remember you in their last will and testament, there are many facets to the process of inheritance that you may not have considered. Here are some things you may want to keep in mind if … Continue reading “Coping with an Inheritance”

Billionaires and Space Travel
Jul 19, 2021

It’s long been an aspirational target for entrepreneurs. It literally goes beyond “blue sky,” in terms of location, to a place no business has gone before: Outer Space! The name of the game is commercial space travel.

The Quiet Fall in Bond Yields
Jul 16, 2021

With all the attention given to inflation, stock prices, and job reports, it’s been easy to overlook the remarkable move in the bond market during the past few months as bond yields have fallen. The yield on the 10-year treasury closed at 1.37% on Friday, July 9, down from its 2021 high of 1.74% in … Continue reading “The Quiet Fall in Bond Yields”

Oil Prices Hit Six-Year High
Jul 14, 2021

On July 6, oil prices reached a six-year high of $76.98 a barrel. This benchmark came as the Organization of the Petroleum Exporting Countries (OPEC) and allies failed to reach an agreement regarding an increase in production.1 This rise in cost follows a year in which OPEC and allies cut production amidst the COVID-19 pandemic. … Continue reading “Oil Prices Hit Six-Year High”

Insights + Resources >