2018 Quarter 2 Review: Individual Taxable Bond Strategy
Most US fixed income indexes recorded flat to marginally positive returns during the quarter as yields broadly rose and the yield curve continued to flatten. Shorter-maturity yields rose more than their longer-maturity peers. The US Federal Reserve (Fed) raised its benchmark interest rate to 1.75%-2.00% at the June Federal Open Market Committee (FOMC) and upgraded its forecast for 2018 rates increases from three to four, plus three in 2019. In addition to rising Treasury yields, investment grade credit spreads widened due to fewer foreign buyers, rate volatility, and trade tensions.
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