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Where Are the Next Opportunities in the Bond Market?

The Bloomberg U.S. Aggregate Bond Index is down nearly 11% since the beginning of the year following the Federal Reserve’s efforts to hike interest rates and control inflation. At the same time, the 10-year Treasury yield more than doubled from 1.51% to 3.16%, sending mortgage interest and other lending rates sharply higher.

The next consumer price index (CPI) reading on July 13 will provide an early indication of the effectiveness of these measures, but higher bond yields are almost certainly having an effect. In fact, some experts believe that bond prices may be exceptionally attractive at current levels, generating attractive yields with limited downside.

Let’s take a look at what bonds investors may want to consider and what products they should continue to avoid.

Don’t forget to check our Fixed Income Channel to learn more about generating income in the current market conditions.

What to Buy

European bonds fall more sharply than during the 2008 financial crisis

What to Avoid

Italy-Germany bond spreads widened to 2.18%

Other Takes

The Bottom Line