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.
As a parent, of course you want to give your child the best opportunity for success, and for many, attending the “right” university or college is that opportunity. Unfortunately, being accepted to the college of one’s choice may not be as easy as it once was. Additionally, the earlier you consider how you expect to … Continue reading “Countdown to College”
New inherited IRA rules took effect on January 1, 2020. The Setting Every Community Up for Retirement Enhancement (SECURE) Act became law on that day, altering the regulations on inherited Individual Retirement Account (I.R.A.) distributions. The big change: the introduction of the 10-year rule for beneficiaries. Most people who inherit a beneficiary IRA now have … Continue reading “The New Inherited Beneficiary IRA Rules”
How do you picture your future? If you are like many contemplating retirement, your view is likely pragmatic compared to that of your parents. That doesn’t mean you must have a “plain vanilla” tomorrow. Even if your retirement savings are not as great as you would prefer, you still have great potential to design the … Continue reading “Retirement Seen Through Your Eyes”
At this time last year, it was still unknown that a deadly global pandemic was on the rise, eventually stalling economic growth and sending crude oil prices into negative territory. But recently, oil prices have surged, with crude hitting highs not seen since before the pandemic.
It can be easy to overlook the nation’s solid economic fundamentals when the financial media splashes stories every day about an army of amateur traders, short-selling mania, and initial public offerings (IPOs) that double in price on the first day of trading. But a recent survey by The Wall Street Journal showed just how upbeat … Continue reading “Economic Predictions: What Lies Ahead?”
Epic Capital provides the following comprehensive financial planning and investment management services: Learn More >