Why Are Yields So Low?
This week in the LPL Market Signals podcast, Ryan Detrick is joined by Marc Zabicki and Lawrence Gillum, where the team discusses one of the big questions lately: how in the world are bond yields so low?
Coach K was a speaker at LPL Focus this year and the team dives into his amazing speech. Ryan points out how Coach K stressed to live in the moment. There are so many things happening at once these days, but focusing on the moment is one way to find success. It was a memorable discussion that the LPL Research team will not soon forget.
Let’s Talk About Bonds
The guys had a fun discussion about potential new leadership at the Fed, but the consensus remains that Powell will get a second term next February. The conversation then shifted to bonds and why yields may be so low. Lawrence noted that yields might look low here, but overseas yields are actually quite high. In other words, with more than $16 trillion in negative yields around the globe, our 10-year Treasury yield at 1.25% actually might not be as low as it seems. Marc and Lawrence both noted that low yields have many concerned about the bond market, but that action in the credit markets is still extremely healthy and shows no signs of stress. If a new recession was coming, we’d likely see more worrisome indicators in the credit markets.
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All index data is from FactSet.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
For Public Use — Tracking # 1-05176006 (08/22)