Richard Clarida, a prominent figure in economics and investment strategies, discusses the strategic shift from cash to bonds in the post-pandemic market. With cash yields declining, he argues for the increasing appeal of fixed income investments. Clarida also delves into the impact of Federal Reserve policies on this transition and highlights the historical stability of bonds as a safer investment option. This insightful conversation offers a fresh perspective for investors navigating these changing financial landscapes.
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insights INSIGHT
Market Signal: Bond Yields Exceed Fed Rate
In November, a key market signal appeared: bond yields surpassed the Federal Reserve's policy rate.
This was the first time this happened in over a year, indicating a potential return to historical patterns.
insights INSIGHT
Shifting Market Landscape and Cash Risk
The market landscape has changed significantly in two years.
Over-allocating in cash now poses reinvestment risk as rates drop.
volunteer_activism ADVICE
Invest in High-Quality Bonds
Consider high-quality, liquid public fixed income.
Starting yields are attractive, and bonds are well-positioned for various scenarios.
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We discuss how, as cash yields dwindle, the case for fixed income becomes increasingly compelling.
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