Yields On A Rise – Fixed Income Overview Update

Yields rose across all fixed income sectors in October, with the benchmark 10-year U.S. Treasury yield rising from 2.99% to 3.23% mid-month. Even with the current rise in rates, yields are still below historical averages.

Some analysts are expecting a slow and moderate rise in rates over the next few months as the Fed orchestrates its monetary policy strategy. There is a growing consensus among analysts that the Federal Reserve is raising rates in order to have the ability to lower rates as a stimulus, should an economic slowdown ensue.

As long as economic growth prevails, heavily-leveraged companies have the ability to expand during a healthy economic environment.

A positive dynamic noted by economists and analysts is that a recession may be averted as the yield curve has not inverted, meaning that long-term rates are still higher than short-term rates.

Sources: U.S. Treasury Department





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