Home » Anything but boring: interest rate turnaround in sight: This is how investors can secure the best interest rates now

Anything but boring: interest rate turnaround in sight: This is how investors can secure the best interest rates now

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Anything but boring: interest rate turnaround in sight: This is how investors can secure the best interest rates now

Interest rate cuts are already on the horizon, whether they start in May or in the summer. Our guest author Bryan Perry explains where the best opportunities lie in government and corporate bonds!

It is clear where the central banks are headed. When the starting signal will be fired and what the pace will be is not yet clear. Investors who want to secure higher interest rates are flocking to fixed income products, government and corporate bonds – in the hope that central banks will soon begin their cycle of interest rate cuts.

Investors have been betting on falling interest rates since the beginning of 2023, but it took until October last year before the yield curve started to move. Yields at both the short and long ends of the yield curve have now fallen significantly. Ten-year federal bonds are currently trading at around 2.3 percent, already below the high of around 3 percent in October 2023. US government bonds are now also yielding 3.9 percent, well below the October high of 5 percent. As Bank of America’s fund manager survey shows in January, investors continue to believe that yields will fall and prices will rise: long fixed income investments will therefore remain one of the most popular strategies in 2024. Investors who invest in long-term, fixed-interest securities benefit from regular interest payments and the repayment of the nominal value at the end of the term.

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