discussion 2306

How does the Fed’s policy actions affect Bond Price? What is your outlook for the bond market in 2019 and 2020?

As you have started the chapter on fixed income securities (bonds), here is a question for your discussion. I have included links to some articles and videos below. Don’t panic, they are very short in most cases. In the first part of your post, discuss how the Fed’s policy decisions can impact the bond market. Who would be most damaged by this Fed action, i.e. long term bond holders who hold till maturity or short term bondholders who plan to sell before maturity. Secondly, in your post, what is the outlook for interest rates and the bond market in the coming two years. Will the bond market flourish or flounder with the actions of the Fed. Please include an addition source for your conclusions, and reply to another poster.

I will expect higher level of analysis going forward on discussion boards, so some will need to put in a little more thought into their post.

Hope everyone had a wonderful 4th and enjoyed your day off! And yes, I am still processing the short answer portion. Slow and tedious.

https://www.finra.org/investors/bonds-and-interest-rates (Links to an external site.)

https://www.investopedia.com/articles/investing/101515/effect-fed-fund-rate-hikes-your-bond-portfolio.asp (Links to an external site.)

https://www.sec.gov/files/ib_interestraterisk.pdf (Links to an external site.)

https://www.nytimes.com/2019/06/19/business/dealbook/fed-rate-cut-bond-yields.html (Links to an external site.)

https://www.cnbc.com/2015/09/15/when-the-fed-raises-rates-heres-what-happens.html (Links to an external site.)

https://www.thebalance.com/when-will-the-fed-raise-rates-3306131

 
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