Vanguard Short-Term Corporate Bond ETF

If we turn back the clock to before the recession, we find that US debt levels weren’t this high, and unconventional programs like quantitative easing helped the economy recover from the Great Recession.

Apprehensions over climate change, an emphasis on global pension funds over the integration of ESG in their investments, and new markets will fuel demand for this type of bond.

Gross has suggested some short-term duration investment products since he believes economic growth may not reach the level of investor expectation.

During a gradual rate hike scenario, Gundlach believes investment in mortgages is the best strategy.

Prominent bond investor Jeffrey Gundlach discussed the bond market’s performance and his expectations for the bond market in a recent interview.

Richard Bernstein believes that investors’ flocking to fixed-income products and shunning equities has increased their risk.

After the release of the FOMC’s November statement, Bill Gross said that monetary policy in the United States is steadily moving toward normalization, though its pace is slow.

The September 2016 FOMC (Federal Open Market Committee) meeting was characterized by three dissents to the status quo on the federal funds rate.

The demand for US investment-grade corporate bonds was driven by higher yields generated by bonds in the midst of low interest rates.

Fiscal stimulus, if it comes about, will help fuel demand-pull inflation.

Bernstein asked a rhetorical question: “Could there be anything that suggests extreme risk aversion more than the increasing proportion of global sovereign bonds that have negative yields?”

The World Bank expects the pace of US economic growth to be 1.9% this year—a sharp correction from the 2.7% pace the bank projected in January 2016.

In his June 2016 investment outlook, Bill Gross stated that “credit risk or credit ‘carry’ offers little reward relative to potential losses.”

According to Lipper funds flow data, investment-grade bond funds saw net inflows of $3.1 billion—the highest inflows YTD (year-to-date)—during the week ending April 27.

Investment-grade corporate bonds worth $17.7 billion were issued in the primary market in the week ended April 22, 2016.

If spreads widen further, high-grade bonds will become more attractive because yields and prices are inversely related. A rise in yields indicates falling prices.

The speech took an interesting turn when Kocherlakota questioned his audience on they should care that inflation is too low.

Bullard went on to talk about the international economy from an alternate view. Under this view, most features characterizing the economy remain the same as under the traditional view—except one.

The preferred measure of core inflation in the United States by the Federal Reserve is changes in the core PCE price index.

Examining credit spreads gives investors an idea of how cheap (a wide credit spread) or expensive (a narrow credit spread) the market for a particular bond category or a particular bond is.