Breaking Bonds: Examining the Unconventional Shift in Fixed Income

During this installment of The Wealth Enterprise Briefing podcast, WE Family Offices Managing Partner Michael Zeuner and Director of Macro Strategy Sam Sudame, CFA, CAIA, CFP, take a deep dive into the intriguing dynamics at play within the bond market. Departing from historical norms, the Federal Reserve policy, traditionally the main driver of the bond market, finds its influence usurped in favor of recent market forces. This episode explores this rare decoupling and examines the factors that may create implications for fixed income investors moving forward.

Key topics addressed in this episode include:

• Shifts in Bond Dynamics: How liquidity and term premium have taken precedence over the Fed's policy rate, traditionally deemed the primary influence on bond yields
• Influence of Emerging Trends: Why newfound trends wield more influence than market fundamentals, causing volatility within the Treasury market
• U.S. Government Deficit's Impact: The role played by the growing U.S. government deficit in the surge in interest rates and its repercussions on the broader economy
• Wealth Protection Strategies: Practical ways fixed income investors may be able to safeguard their wealth amidst the current market volatility

To gain a deeper understanding of the fixed income landscape during a period of high interest rates and increasing government debt, we recommend reading our recent commentary, Fixed Income – U.S. Debt Dynamics. As always, if you have any questions regarding the bond market and its potential impacts on your portfolio, please do not hesitate to contact us.