"Best investment in America!"
Posted on 04/23/2025 4:20:02 PM PDT by Aquamarine
Is it a bond market crisis — or not? That is the question many investors are pondering at this moment of worrying moves.
"I wouldn't say it's a crisis," Charles Schwab (SCHW) chief fixed income strategist Kathy Jones told Yahoo Finance Executive Editor Brian Sozzi on Yahoo Finance's Opening Bid podcast (see the video above or listen below). "It's just different [this time]."
Jones has been closely studying the bond market for years, with a résumé that includes stints with Morgan Stanley (MS) and Citigroup (C). She has been at Charles Schwab for nearly 15 years.
During her tenure, markets have provided all kinds of moments that worry investors and speculators alike. "I've been doing this a very long time, and I've been through several crises," Jones said, citing the tech bubble burst in 2000 and the blowup of hedge fund Long-Term Capital Management as examples. "Every big event has its own unique qualities."
Bonds have traditionally been used for balancing portfolios or reducing investors' risk exposure to the stock market. Typically, when stock prices have gone down, bond prices go up. But both markets have proven to be a bit rockier lately, with stocks and bonds declining in tandem.
Often, woes around bonds turn to concerns about whether the US will default on its future debts, or if these moments might signal a deeper risk of recession.
(Excerpt) Read more at finance.yahoo.com ...
I am happy holding portfolio of bonds. Guaranteed interest for life of bond, ending with return of full face value at maturity. What’s to complain about?
Federal government will never default on debt unless their money printing machine breaks down.
But but but.....we were screamed at that the bond vigilantes were going to tank the US, because Trump.
PLenty right here on FR said so.
Schiff is another bond doon-n-gloomer saying such as that.
I do not even worry about interest rates. I bought 20 year maturity treasury bonds locked in at 5% interest. Even if I can sell those bonds at profit, I will not sell. I like the steady income year after year.
You are right on target. With interest rates going down Bonds would be a better option than CD's.
Bond interest rates are too low considering Inflation and Income Taxes.
Just a way at the moment to manage wealth decline.
Bond interest rates are way better than CD’s, savings accounts. Stocks are more over-valued (even after the recent decline) than at top in 1929 before the horrific crash. With my age at 85, only stocks I am holding are the reliable dividend payers.
Inflation is now below 2% and with Trump’s policy it will stay low.
Also capital gains in stocks are taxable as well.
Right now any AA Muni paying 4%+ is attractive, if one has a high paying job or other big income. I am retired since 1998, and do not have any income from jobs. Retirement for 27 years has been wonderful, with great improvement in health. Gave me chance to play 3050 rounds of 18 holes in retirement. That improved my health beyond wildest expectations.
Long held Capital Gains are taxed on the long term accumulated Inflation.
It’s theft, pure and simple.
“Federal government will never default on debt unless their money printing machine breaks down.”
Our government don’t just ‘print’ money. It borrows it and has to pay interest. As our economy looks shakier, lenders demand higher interest on their loans to us.
If the total interest expense on existing borrowing becomes too high, presumably the government will quit paying the interest or perhaps not even return the original bond amount to holders.
Nope. Federal govt has 2 options to fund budget deficits.
1. Sell Treasury bonds/Bills/notes. That adds to national debt.
2. Increase balance sheet on Federal Reserve’s book.
The 2nd option literally creates money out of thin air.
And of course the federal govt has a 3td option to increase taxes to meet the shortfall. Believe me, private corporations and individuals will go broke before the federal government.
“[option] 2. Increase balance sheet on Federal Reserve’s book ... [which] literally creates money out of thin air.”
Can you give a layman’s explanation, perhaps an example?
“And of course the federal govt has a 3td option to increase taxes to meet the shortfall.”
Good point. Guess the other two options are more politically appealing because they are sneaky.
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