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Use these simple visuals to help illustrate technical market perspectives to clients.
An intermediate-term bond opportunity?
5/2/2023
Intermediate-term bonds have outperformed short-term bonds after the end of past rate-hike cycles.
Key takeaways:
- We think U.S. interest rates may be at or near their peak for the current cycle. For bond investors, this means yields on intermediate- and long-term bonds may continue to trend lower from mid-April levels.
- In past cycles when interest rates have hit their peak, returns on intermediate-term bonds have generally outpaced short-term bond returns over the subsequent 12 months.
- With these historical results in mind, we continue to believe that bond investors could potentially be well served by lengthening the durations of their fixed income allocations.
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