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Are Bonds Back, Baby?

Are Bonds Back, Baby?

April 05, 2023

Last year was abysmal year for bonds. As a matter of fact, 2022 was the worst-ever year on record for U.S. bond investors, according to CNBC, as the total bond index slid over -13%. Worse yet, long term U.S. Treasuries were down a whopping -29.3%.  Blame it on the Fed's interest rate hikes (remember, bond prices move opposite of interest rates) and pesky inflation. 

Fast-forward to today, and bonds... well, could bonds be back, baby?!

Check out these findings from on of our partners, PGIM Investments: 

As the Federal Reserve may be nearing the end of its rate hiking cycle, investors may benefit by allocating to short-term and intermediate core-plus bond funds.

Historically, these funds have outperformed CD average returns in the 1-, 3-, and 5-year time periods following peak CD rates.

If the Fed is really nearing the end of their rate hike cycle, and we're seeing peak CD rates then.... Bonds might just be back, baby!