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This week on the One Minute Retirement Tip podcast, I’m going in depth into our quarterly update that we send to our clients to discuss the current economic and market environment as we enter the last quarter of 2021. Today, I’m talking about bonds, baby! What’s going on with bonds?! Well, a lot actually. As I mentioned yesterday, there are some inflation concerns that are driving markets, and that’s especially true in the bond market, where bonds are really sensitive to higher inflation. That’s because when you buy a bond, you’re locking in a certain interest payment twice a year that’s unchanging. So when inflation eats away at that, it makes those payments and hence the bonds themselves worth less money. Related to inflation, and what’s probably driving bond markets even more right now is the likelihood that the Federal Reserve will start raising rates and taper their bond purchases. It now seems likely that they’ll announce this intention formally at their meeting in November, and start tapering in 2022. Bond yields are already rising in anticipation of this move, which is why you may have seen news headlines about the 10-year treasury yield going higher. That’s been happening because of what the Fed has been saying and will likely continue. So what does this mean for bond investors? If you’ve been disciplined and stayed invested in short and intermediate term bonds that don’t mature beyond the next 5-7 years, then your patience will soon hopefully be rewarded with higher rates. Bonds in the short to intermediate term categories should hold up ok and will likely benefit from being able to once again reinvest at higher rates. The bottom line is that as rates go up, investing in bonds becomes more attractive again, especially relative to holding cash, and even to owning stocks, so the while the rise in interest rates may hurt some bond investors, many will likely benefit, especially if you’re adding new money to bonds or re-investing bonds that are maturing soon. That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip podcast. ---------- >>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP >>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs >>> Visit the podcast page: https://truenorthra.com/podcast/ ---------- Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance