Issues in the News
Five Reasons to Sell Your Long-Term Bond Fund Now
Long-Term Bonds Outlook: If you own a long-term bond fund, it's time to sell - at this point, you're just picking up pennies in front of a freight train.
Can an Investor Exodus from Bond Funds Cause a Market Crash?
Bond fund liquidity risk: With reduced liquidity in the bond market, what are the odds that a panic by bond fund investors could cause a market crash?
The Bright Side of U.S. Federal Reserve Rate Hikes
Investors may be worried about the possibility of interest rate increases by the U.S. Federal Reserve, but one group stands to win when rates rise: savers.
Are Bonds a Good Investment? Bill Gross May Have the Answer.
Are bonds a good investment right now? It may depend on how far the Federal Reserve raises rates. Many experts see interest rates rising as high as 4%, but Bill Gross has a different take.
The U.S. Yield Curve is Flattening. Does it Matter?
The U.S. Treasury yield curve has flattened so far in 2014. Should investors be concerned about what this means for the economic outlook?
Will Federal Reserve Rate Hikes Crush the Bond Market?
The consensus expecation is that the first rate increases by the U.S. Federal Reserve will cause a bond bear market, but these fears may be exaggerated.
Current Federal Reserve Policy: A Layperson's Explanation
Learn about all aspects of the Federal Reserve's current policy regarding interest rates and quantitative easing. What would lead to a change in Fed's policy?
What is Quantitative Easing?
A layperson's explanation of the Federal Reserve's quantitative easing policy, the differences between QE1, QE2, and QE3, and how quantitative easing has affected the financial markets.
An Explanation of Fed Tapering and its Impact on the Markets
A definition of "tapering," along with a simple explanation of why the prospect of tapering frightens the markets so much.
What is the Federal Funds Rate?
The federal funds rate – typically referred to in the press as “the fed funds rate” – is the rate at which banks with balances on held at the Federal Reserve borrow from one another an overnight basis. How does the fed funds rate work, and what is its impact on the economy?
What is Operation Twist?
“Operation Twist” is a program conducted by the U.S. Federal Reserve to help stimulate the economy. Learn more about the basics of Operation Twist and its impact on the U.S. bond market, as well as the details behind the Fed's June 20 decision to extend Operation Twist for another six months.
What is the Discount Rate?
Find out how the Federal Reserve's discount rate works, the impact of the discount rate on the economy, and how the discount rate differs from the fed funds rate.
When Will the Fed Raise Rates?
When will the Fed raise rates? That's the question on all investors' minds given the role Fed policy has played in the performance of both stocks and bonds. Get the layperson's explanation of why rates are so low, what it would take for the Fed to raise rates, and what higher rates would mean for your portfolio.
The Difference Between Fiscal Policy and Monetary Policy
How do fiscal policy and monetary policy differ, and what impact can they have on your investments?
Why Are Yields So Low?
Yields on government bonds and short-term investments have fallen to extremely low levels in recent years, punishing those who are investing for income. Find out why yields are so low, and what you can do about it.
Low Inflation Provides Continued Support for Bonds
The global inflation outlook remains favorable, and that's unlikely to change any time soon. Why the benign inflation outlook is good news for bonds.
The Difference Between Deflation and Disinflation
Deflation vs. disinflation: the difference between the two, and what each means for the economy and financial market performance.
The Monthly Jobs Report and its Impact on the Bond Market
On the first Friday of every month, the U.S. Labor Department reports key employment data - including the unemployment rate - in its monthly jobs report. Of all the economic reports released each month, the jobs report has the largest impact on the bond market. Find out why bond yields are so sensitive to the jobs report, and what it means for...
Is There a Bond Bubble?
Is there a bond bubble? Find out what the bond bubble is and what would a bursting bubble might mean for your portfolio.
Historical U.S. Treasury Yield Charts
See the long-term, historical yield charts for 2-year, 5-year, and 10-year U.S. Treasuries, together with a brief description of the forces influencing Treasuries' yield movements over time.
What is the Debt Ceiling? A Simple Explanation of the Debate and Crisis
A simple explanation of the debt ceiling debate and crisis: Find out how the debt ceiling works, and how the debate could impact financial market performance.
What is the Great Rotation?
The term “Great Rotation,” which came to prominence in late 2012, refers to the widespread prediction that record-low bond yields will prompt investors to rotate out of bonds and into stocks in the years ahead. Is the Great Rotation a legitimate concern?
What is the European Debt Crisis?
The European debt crisis, which began in late 2009, is the shorthand term for the region’s struggle to pay the debts it has built up in recent decades. This is one of most important issues facing the world economy, but it is also one of the hardest to understand. Here is a Q&A to help familiarize you with the basics of, and outlook for, the...
What is the Fiscal Cliff?
"Fiscal cliff" is the term used to describe the dilemma U.S. lawmakers will face at the end of 2012: cut the deficit but potentially hurt economic growth, or adopt growth-oriented policies that would add to the United States' current deficit problem. Learn more about what the fiscal cliff is, its potential impact on the U.S. economy, and how it...
U.S. Treasuries: No Longer a AAA-Rated Investment
In 2011, the rating agency Standard & Poor's downgraded U.S. debt from AAA to its second-highest rating, AA+ amid the rancor related to the debt-ceiling debate. Find out the details of S&P's downgrade and its surprising impact on U.S. Treasuries.
What is the Debt to GDP Ratio?
Learn what the debt-to-GDP ratio is, why a manageable ratio is essential, and how the debt-to-GDP ratio can affect bond yields.
Who are the Largest Foreign Owners of U.S. Debt?
The largest foreign investor in U.S. Treasuries is currently China, but that may be about to change. Find out how much of the United States' debt is owned by foreign countries, what countries own the most U.S. debt, and how their holdings in U.S. Treasuries have changed in the past year.
How Much U.S. Debt Does China Own?
China owns a large, and growing, percentage of the United States' debt. How large is China's position in U.S. Treasuries, and does it matter?
Why China Will Buy Fewer U.S. Treasuries in the Years Ahead
China is the largest buyer of U.S. Treasuries, but changes in China's economy may change that. What are the implications for the U.S. bond market?
What is the Flight to Quality?
What is the flight to quality, and how can you profit when it takes place?
Elections and Bond Market Returns
Election results can have a meaningful impact on bond market performance. Find out how politics have affected bonds in the past, and what outcome the 2012 elections may have on bond market returns.