10 min
Navigating the Bond Market Maze: Recession Risks and Investment Strategies Casual Friday: Financial Insights
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- Investing
This week Brian discussed how both longer-term Treasury yields and short-term Treasury yields tend to decline during recessions, but the effect is larger and more consistent with short-term Treasuries.
Over the last eight recessions, the median maximum yield decline for the 3-month Treasury was 2.82% and 1.14% for the 10-year Treasury.
With an attractive yield compared to recent history and prospects of price appreciation if there were a recession, intermediate maturity Treasuries have a reasonable outlook on top of their potential diversification benefits if we were to see a downturn.
The prospect of a decline in yields makes shorter maturity Treasuries less attractive, as investors may need to reinvest at much lower rates when bonds mature.
Check out our old Yield Curve episode
Click here for a treasury yield chart
This week Brian discussed how both longer-term Treasury yields and short-term Treasury yields tend to decline during recessions, but the effect is larger and more consistent with short-term Treasuries.
Over the last eight recessions, the median maximum yield decline for the 3-month Treasury was 2.82% and 1.14% for the 10-year Treasury.
With an attractive yield compared to recent history and prospects of price appreciation if there were a recession, intermediate maturity Treasuries have a reasonable outlook on top of their potential diversification benefits if we were to see a downturn.
The prospect of a decline in yields makes shorter maturity Treasuries less attractive, as investors may need to reinvest at much lower rates when bonds mature.
Check out our old Yield Curve episode
Click here for a treasury yield chart
10 min