Wednesday, October 23, 2024

Bank of Canada cuts key rate to 3.75%: What does that mean for consumers?

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Why it’s a ‘great time’ to enter the bond market

Interested in navigating the bond market? F/m Investments senior portfolio manager and US Benchmark Series Co-Founder Pete Baden joins Wealth to his insights on bond investing strategies. Amid uncertainty surrounding the Federal Reserve’s rate-cutting timeline, Baden notes there are “echoes of higher for longer.” However, with rate cuts still on the horizon, he suggests this is “a great time” to enter the bond market, calling it “a second opportunity” to secure yields and lock them into portfolios to “generate income that will support you going for years forward.” When it comes to different bond types, Baden explains that US Treasury Bonds are “considered safe” and provide refuge during wars and recessions. As for corporate bonds, these investment-grade securities track companies’ ability to make interest payments. They typically perform well during economic strength, but Baden cautions, “You don’t necessarily want to be in high-yield bonds if you think the economy’s not going to do well because those companies are usually the first ones to really show the pressure of a declining economy.” To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Angel Smith

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