The U.S. Federal Reserve's (Fed) policy setting committee boosted its benchmark rate (fed funds rate) by 75 basis points (bps) or 0.75% on Wednesday, September 21st. That was the third consecutive increase of such magnitude, and it brought the target range for the federal funds rate to 3.0% - 3.25%, the highest level since before the 2008 financial crisis. In the days leading up to the Fed meeting, the benchmark 10-year U.S. Treasury yield climbed past 3.5%, its highest level since 2011, while the 2-year U.S. Treasury yield which is more sensitive to Fed policy actions hit its highest level since 2007, topping 4.0%.
The Fed has been...
What Are Bonds?
A bond is an IOU in which you, the investor, agree to loan money to a company or government or other known entity - called the Issuer - in exchange for a specified rate of interest over a fixed period of time. Its opposite is a stock, which represents ownership in an...
Apr 03, 2003
Check the credit rating of the issuer of your bond before you buy
Higher risk bonds offer higher yields. These bonds are rated BB+ and below
Lower risk bonds offer lower yields. They are called “investment grade” and are rated “BBB-” and above....
Mar 24, 2003
The buying and selling of bonds can be a very simple and straightforward process, but there are a few features that must be understood regarding the calculations.
The face value of the bond can be considered the “principal” value of the loan. It is what the issuer will...
Mar 04, 2003
WHO INVESTS IN BONDS
Today we are going to look at the following two areas: Who are the people or institutions that usually invest in bonds; (and) What are their reasons for doing so?
First, however, we’ll do a quick recap of some of the basic facts about bonds. A bond is a form of I...
Feb 19, 2003
HOW RISKY ARE BONDS?
Last week we established that bonds are fixed interest investments that give higher returns than money market investments and individual investors or institutions that are looking for income and modest growth in the medium to long term investments would find them...
Feb 19, 2003