The U.S. bond market is about to enjoy the proverbial best of both worlds. Bond yields, an approximation for annualized bond returns, are high — the Bloomberg U.S. Aggregate Bond index yields 4.6%; U.S. high-quality corporate debt, 5.1%. And interest rates are poised to move lower, which means bond prices will ratchet up. (Interest rates and bond prices move in opposite directions.)
Together, that’s a double leg up for bond market total returns. “I think this is one of the best times to put money to work in the bond market in 20 to 25 years,” says Thomas Urano, a managing partner at Sage Advisory.
