Insights + Resources

Outlook 2021: Bond Prices

Jan 27, 2021

Bond Price Bond Market Sign
Information you should know

The 10-year Treasury yield has climbed higher since the New Year, which means that some bond prices are dropping. You may have seen the headlines that say, “10-Year Yields Over 1%.”

For some, the first time they experience a change in bond prices is when they open their monthly statement and review their investments.

But before you check your January statement, here is some background that may help put the most recent move in rates in perspective when looking at bond prices.

The interest rate on the 10-year Treasury dropped steadily in the first half of 2020 and bottomed at 0.54% in late July. While rates remain at historic low levels, the yield on the 10-Year Treasury has doubled in the past six months. That’s a significant increase in a relatively short period of time. The recent rally that pushed the yield over 1% has drawn the most attention.1

Why are rates going higher?

Even with the Federal Reserve holding short-term rates near zero, yields on longer-term bonds can move higher as the economy begins to improve and inflation expectations rise.2

Will bond yields keep going higher?

A lot may depend on the path of the virus, vaccine distribution, and what’s next with additional stimulus money.3

Bonds can play an important part in any portfolio, but like any investment, periods of volatility are expected. If you’re concerned about the outlook for bonds, or the macro-economic trends behind the bond market’s rally, please give us a call. We’d welcome the chance to hear your perspective, and hopefully, we can provide some guidance.

For more 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

Sep 24, 2021

Most likely, you’ve heard what’s brewing in Washington, D.C. called by one of these names. The Build Back Better Act. Or the $3.5 trillion budget reconciliation bill. Or the Jobs and Economic Recovery Plan for Working Families. But could it affect your taxes?

Sep 22, 2021

Healthcare can be one of the priciest yet essential parts of life’s journey. And yet, many struggle to utilize the financial tools that may help. Take Health Saving Account (HSAs), for example.

Sep 20, 2021

If you are feeling a bit confused about the direction of inflation, you’re in good company. Some of the best and brightest economists in the country are having a tough time getting their arms around the current inflation trends. The most recent Producer Price Index reading came in above economists’ estimates at a record level … Continue reading “The Best, the Brightest, and Inflation”

Sep 17, 2021

Want to give your child or grandchild a great financial start? A Roth IRA might be a choice to consider. There are many reasons why starting a Roth IRA for a teenager may be a sound financial strategy. Read on to learn more about how doing this may benefit both of you.

Sep 15, 2021

The bull market continues, with the S&P 500 Index now up seven months in a row. Stocks have impressively gained 20% year-to-date, with the S&P 500 making 53 new all-time highs before the end of August—another new record. All of this has happened with very little volatility, as the S&P 500 hasn’t had so much … Continue reading “The Bull Market Continues … For Now”

Insights + Resources >