The case for short-term bonds

[ "Blog: Latest Insights" ]
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[ "Kris Moreton, CFA", "Katy Nuss, CFA" ]
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The Fed has been clear that it sees rates moving lower. What does this mean for investors sitting in cash?

We've got three dynamic charts for investors looking to make that first step:



Key takeaways:


  • We think short-term bonds are a good get-back-into-the market solution for investors who are still counting on cash.


  • Current yields remain well above the average of the last decade, providing investors with an opportunity to lock in the potential for attractive future returns with a significant cushion against interest rate volatility.


  • We think investors should consider making changes sooner rather than later. Here’s why: When Treasury yields dropped by as much as 100 basis points at the end of 2023, bonds rallied. And while cash generated a positive total return, it was meaningfully lower than anywhere else in the bond market — showing that markets move well ahead of the Fed. 


Learn more with these charts:


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