The Federal Reserve's policy of keeping interest rates low to spur growth has had the secondary result of
lowering yields on bonds and other securities, encouraging investors to look elsewhere for higher returns.
Increasing life expectancy, disappearing sources of guaranteed income, and historically
low yields on bonds make for some tough fixed - income investing conditions; a disciplined approach can help.
The low yields on bonds and GICs are pushing investors towards dividends.
Not exact matches
LONDON, April 23 - Hamstrung by a renewed slump in volatility and lack of clear market direction, FX and
bond speculators are making historically big bets
on a
lower dollar and higher
yields.
In a client note
on Thursday titled «Yanking down the
yields,» the interest - rates strategist projected that
bond yields would be much
lower than the markets expected because central banks including the Federal Reserve were reluctant to raise interest rates.
The
yield on the benchmark 10 - year Treasury note was
lower at around 2.998 percent at 1:07 p.m. ET, while the
yield on the 30 - year Treasury
bond was
lower at 3.18 percent.
While investors will have to find stocks with higher
yields, pay more for them and take
on more risk in
bonds, the biggest change in a permanently
low - rate world is that people will need to set aside more of every paycheque if they want to keep the same goal for retirement income.
The
yield on the benchmark 10 - year Treasury notes, which moves inversely to price, was
lower at around 2.43 percent, while the
yield on the 30 - year Treasury
bond was also
lower at 3.046 percent.
With the Fed actively buying securities
on the open market, the additional demand means
bond issuers can promise
lower yields and still attract investment.
The
yield on the benchmark 10 - year Treasury notes sat slightly
lower at 2.221 while the
yield on the 30 - year Treasury
bond slipped to 2.797 percent.
While Fink is right to point out that
low interest rates are putting a large burden
on those of us trying to save retirement, he does not address the fact that central banks aren't primarily responsible for the fact that
bonds of all types are
yielding less today than we're used to.
Following the report, the
yield on the benchmark 10 - year Treasury note was
lower at around 2.959 percent at 3:46 p.m. ET, while the
yield on the 30 - year Treasury
bond was
lower at 3.128 percent.
«But due to the
low coupons prevailing, even a gradual rise in
yields will result in negative returns
on a wide range of government
bonds over the coming quarters.»
The company's lone outstanding junk
bond, worth $ 1.8 billion and maturing in 2025, briefly dropped two points to as
low as 85 cents
on the dollar for a
yield of around 8 percent
on Monday, according to MarketAxess data.
Germany's benchmark 10 - year
bond yield was up almost 2 bps at 0.58 percent in early trade, above a one - week
low of 0.56 percent hit
on Friday.
Although it is fair to say that the recent uptick in volatility has in part reduced earlier concerns about prolonged
low volatility and associated reach - for -
yield behavior, it has placed added focus
on the resilience of liquidity, particularly in markets, such as the market for corporate
bonds, that may be prone to gapping between liquidity demand and supply in stressed conditions.
More from The New York Times: For
Bond Investors,
Low Expectations in a
Low -
Yield World Emerging Market
Bonds Are
on a Roll.
The
yield on the Merrill Lynch junk
bond composite is up 205bps from last year's
low of 5.16 %
on June 24 to 7.21 % currently.
Rates
on government
bonds in Germany and Switzerland fell further into negative territory after Brexit, while
yields on 10 - year Treasuries dropped below 1.5 % and touched record
lows.
Second, the average time to maturity
on U.S. debt is six years, meaning that most of the
low -
yielding bonds now
on the books will be exchanged for more expensive debt over the next decade.
LONDON, April 25 (Reuters)- Worries over rising
bond yields and falling metals prices trumped well - received earnings updates from Kering and Credit Suisse
on Wednesday, sending European shares to a one - week
low.
The
yield on the benchmark 10 - year Treasury note was slightly
lower at around 2.944 percent at 12:28 p.m. ET, while the
yield on the 30 - year Treasury
bond slipped to 3.106 percent.
Gold prices hovered near multi-week
lows on Thursday as higher U.S.
bond yields and a stronger dollar dampened interest in bullion.
U.S. government
bonds saw buying
on Tuesday, pulling
yields lower, after Secretary of State Rex Tillerson was ousted from the White House.
Treasury prices cut earlier losses
on Monday, pushing
yields slightly
lower, after stocks fell sharply, pushing investors into haven assets like government
bonds.
On a serious note, I was rotating into utilities instead of
bonds because of
low bond yields.
Treasury
yields edge
lower on Thursday, with the 10 - year government
bond hanging around its
lowest level in about seven weeks
the percentage of return an investor receives based
on the amount invested or
on the current market value of holdings; it is expressed as an annual percentage rate;
yield stated is the
yield to worst — the
yield if the worst possible
bond repayment takes place, reflecting the
lower of the
yield to maturity or the
yield to call based
on the previous close
-LSB-...] the long - term returns
on bonds will certainly be
lower than average based
on the current
yields.
During times of recession the economy is stimulated with
low interest rates and once they get
low enough, the
yield on bonds and other fixed investments becomes so unattractive that money starts to flow into equities.
The 35 year bull market in
bonds most likely ended
on July 8, 2016 when the 10 year maturity U.S. Treasury Note
yield hit an all - time
low of 1.36 %.
Also, here's a good one
on the potential for
lower bond returns using a historical period for the
lower yield environment you talked about:
When savings account rates and
yields on government
bonds are
low, gold suddenly becomes much more attractive to hold as a store of value.
For example, some investors may have taken
on more risk in their portfolios in recent years by moving into
lower - quality
bonds or dividend stocks, in an attempt to generate additional
yield.
The institutions are not only using the money to meet their own short - term financing needs, they are also borrowing additional money to purchase the
bonds of troubled countries and earn the spread between the
yields on those
bonds and the much
lower rate the ECB is charging them for money.
Whatever happens to rates from here it makes sense to reign in your expectations as a
bond investor based
on today's
low starting
yields.
Banks plunged as
bond yields continued to fall, which will mean
lower interest rates
on loans.
Persistently
low official inflation rates in recent years depressed
bond yields along with risk premiums
on all financial assets.
For example, it does not include euro
bonds («reverse Yankees») that are hot in Europe, where junk
bond yields are at a ludicrously
low 2.35 %
on average, and the high - grade
yield is just above zero.
-LSB-...] happens to rates from here it makes sense to reign in your expectations as a
bond investor based
on today's
low starting
yields.
As long as Group of Seven nation
bond yields remain generally
lower than similar - maturity Treasuries, it's just one more reason why
yields on U.S.
bonds are likely to stay
lower for even longer.
Despite the flirtation of 3 percent
yields on the 10 - year Treasury
bond, many folks don't believe the multi-decade run of
lower interest rates has ended.
In
bond markets,
yields on 10 year
bonds are now at their
lowest levels for two decades.
The average investment - grade (high -
yield)
bond trades
on less than 32 % (36 %) of days over the prior six months — liquidity in corporate
bonds was considerably
lower than in traditional listed equity markets.
But long - term government
bond yields fell to record
lows for many euro area countries after a speech by ECB President Draghi
on 21 November, which stressed that the ECB will do what is required to raise inflation and inflation expectation by adjusting the size, pace and composition of asset purchases, if the currently announced policies prove to be insufficient.
Yields on high - yield corporate bonds narrowed (centre panel) and record low government bond yields pushed up valuations of risky assets (right - hand p
Yields on high -
yield corporate
bonds narrowed (centre panel) and record
low government
bond yields pushed up valuations of risky assets (right - hand p
yields pushed up valuations of risky assets (right - hand panel).
The Fed's accommodative monetary policy after the recession helped goose stock prices, in part by
lowering yields on safer assets like Treasury
bonds.
The first thing they watch when doing so is how high or
low interest rates
on treasury
bonds with different maturities are, which is also referred to as the
yield curve.
As a result,
bond yields were
lower than the
yields on common stocks.
In recent months, the
yield on US corporate
bonds, especially investment - grade securities, is a little more than 100 basis points compared to the
yield on government debt, dropping within striking distance of the
lows seen post the 2008 financial crisis.