The Quiet Fall in Bond Yields

With all the attention given to inflation, stock prices, and job reports, it’s been easy to overlook the remarkable move in the bond market during the past few months.  There is a good chance that bonds make up a certain percentage of your portfolio so keeping an eye on the bond market is wise.  Here are some quick notes on bond yields.

The yield on the 10-year treasury closed at 1.37% on Friday, July 9, down from its 2021 high of 1.74% in late March.1

What’s behind the quiet fall in bond yields?

One explanation may be that reopening sentiment has turned a bit more cautious as the Delta variant of COVID-19 spreads globally. Another view is that overseas investors are buying Treasuries, effectively lowering yields.2,3

Still another school of thought says it’s due to declining inflation concerns. Or maybe it’s simply more money finding its way into bonds.2

Whatever the cause, the yield narrative has changed from just a few months ago when market pundits believed that the 10-year treasury was heading to 2%.1

Will yields keep trending lower or will they do an about face and move higher? A better question to ask yourself is, “does my investment strategy fit my goals, time horizon and risk appetite?” Challenge yourself to tune out the market noise and focus on what matters to you.  If you need some guidance reach out to

1. U.S. Department of Treasury, July 12, 2021

2. CNBC.com, July 8, 2021

3. The Wall Street Journal, June 11, 2021

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