How does the changing Fed interest rates change typically lead to the change in bond fund prices? Doesn’t the duration of the fund matter? Does it matter if they are junk bonds vs something like the total market?
Not prognosticating in any way, but assuming it’s not already built into current prices, how would you expect different bond funds (short, intermediate, long term, as well as junk vs government, etc) to change in price if the Fed starts cutting rates throughout 2024? What would be expected if rates slightly increased or remained constant ?
I never had a deep understanding of bonds but looking into it more closely it appears as though something as simple as, bond prices decrease when interest rates rise, is apparently too general of a statement. I’m sure my question is even still too general. But any knowledge to share would be welcomed.
Not prognosticating in any way, but assuming it’s not already built into current prices, how would you expect different bond funds (short, intermediate, long term, as well as junk vs government, etc) to change in price if the Fed starts cutting rates throughout 2024? What would be expected if rates slightly increased or remained constant ?
I never had a deep understanding of bonds but looking into it more closely it appears as though something as simple as, bond prices decrease when interest rates rise, is apparently too general of a statement. I’m sure my question is even still too general. But any knowledge to share would be welcomed.
Statistics: Posted by dave.m — Sat Jan 27, 2024 6:18 pm — Replies 4 — Views 275