What Rising Interest Rates Mean for Your Bonds

We tend to think of bonds as boring, a ballast to temper stocks’ swings. But bonds have shown that they’re perfectly capable of volatility, thank you very much. The yield on the benchmark 10-year Treasury note has shot up recently on inflation concerns, and rising rates have pushed bond prices down. This is bad news for owners of bond funds: In just one example, the Vanguard long-term bond fund is down around 13% over the last three months. But it’s better news for income-focused investors, since bond yields rise when prices decline. All in all, it’s a mixed bag for fixed income. Learn more about the 10-year Treasury, and rising interest rates’ effect on bonds, in today’s edition.

Best wishes,
Elizabeth

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TIMELY RETIREMENT NEWS, INSIGHTS, AND ADVICE

What Rising Interest Rates Mean for Your Bond Funds (Hint: It's Gonna Hurt)

But the outlook is better for income investors.

The 10-Year Treasury Yield Just Hit Its Highest Level in More Than a Year

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Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

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