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Chart of the Day: Not Since 1788

Crews Bank & Trust Wealth Management Services Nov 9, 2023
history of bonds and treasury interest rate

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Today’s Chart of the Day from Bank of America shows that the increase in the 10-year treasury interest rates in 2022 caused the worst price decline since 1788.Normally, price declines can be somewhat offset by the yearly interest payments, but in this case, the interest payments were so low, that they are providing little to no support. This phenomenon is called having a high convexity which is plaguing bonds that were issued when the rates were at historic lows. The chart title shows that we have never, in the history of the U.S., seen bonds decline for three years in a row, and there is a better than average chance they will not, but past performance is no guarantee of future returns. 
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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