aiSource
INVESTMENT ALTERNATIVES.
TRUSTED ADVICE
Menu

Where Will Bonds Go From Here?

Categories:
  • Market Commentary

If you have been in the market to buy a home recently, chances are you've noticed that mortgage rates have gone up from their lows many months ago.  While this is causing some home buyers to lock up a mortgage due to fears that interest rates will continue to rise, others are being more patient using the "wait and see" approach.  The latter group is still not convinced that rates will continue to rise and are expecting them to come back down once we have a firm announcement from the Fed regarding their plans to taper bond purchases. 

This all started back in May 2013 when the Fed revealed indefinite plans ( or "intentions") on slowing down the rate of bond purchases.  While no date has been announced when the rate of asset purchasing will decrease, market participants began selling bonds soon after the Fed's announcement in May (See chart below).

As the sell-off in bonds continued, the price of bonds went down, yields went up, causing interest rates to rise.

As we wait for the Fed's expected announcement this month on their plan and timeline to decrease asset purchases, speculation will continue to add volatility to the fixed-income market as participants try to predict what will happen.  Eric Hickman, portfolio manager of Kessler Investment Advisors, a CTA that trades strictly U.S. fixed income futures, truly believes that the Fed is being premature in their plans to taper quantitative easing.  Mr. Hickman believes that many economic indicators are still extremely weak, and therefore, it is not yet time to begin a slowdown of asset purchases.  

Disclaimer: Past performance is not indicative of future results. Futures trading involves substantial risk of loss and may not be suitable for everyone. By no means is this newsletter/blog post offering any investment advice or suggesting to make any trade recommendations. Please consult an aiSource advisor prior to opening any managed futures accounts.


CTA DATABASE

Sign up to access hundreds of different managed futures programs in our CTA database.

aiSOURCE NEWS

Get the latest reports in managed futures, straight from the Source. Enter your email and get the news.

aiTRACKER

A simple way to monitor your CTA portfolio without the hassle of looking at FCM statements.

Past performance is not necessarily indicative of future results. Trading commodity futures, options, and foreign exchange ("forex") involves substantial risk of loss and is not suitable for all investors. In no way is the advisor of the month a direct recommendation of aiSource or any of its affiliates. Please carefully review the disclosure documents and any other promotional material prior to investing with any program. Managed accounts and/or managed futures are very risky and may not be suitable for all investors. Please consult with a Managed Futures specialists prior to investing.