Federal Reserve Cuts: What Bond Investors Need To Know

Aug. 14, 2024 12:39 PM ET, , , , , , 66 Comments

Summary

  • The Federal Reserve is guiding for several rate cuts in the coming months.
  • Cuts should lead to lower interest rates across bonds and fixed-income assets, but specifics vary.
  • The impact on short-term, investment-grade bonds will be swift and certain, less so for long-term and high-yield bonds.
  • An in-depth analysis of the impact of Fed cuts on different bond sub-asset classes follows.
  • This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More »

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Federal Reserve Rates - Quick Overview

A couple of months ago I wrote an article analyzing how lower Fed rates should impact different market rates on bonds, loans, and assorted fixed-income securities. With rate cuts imminent, I thought to have another look at

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This article was written by

11.06K Followers

Juan de la Hoz has worked as a fixed income trader, financial analyst, operations analyst, and as an economics professor. He has experience analyzing, trading, and negotiating fixed-income securities, including bonds, money markets, and interbank trade financing, across markets and currencies. He focuses on dividend, bond, and income funds, with a strong focus on ETFs.

Juan is a contributor to the investing group CEF/ETF Income Laboratory which is led by Stanford Chemist. Features of the service include: managed income portfolios (targeting safe and reliable ~8% yields) making use of high-yield opportunities in the CEF and ETF fund space. These are geared toward both active and passive investors of all experience levels. The vast majority of CEF/ETF Income Laboratory holdings are also monthly-payers, for faster compounding and steady income streams. Other features include 24/7 chat, and trade alerts. Learn More.

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