Nevertheless, investors should be aware that rates don’t have much room to drop any lower. Meanwhile, with a recovering economy, the Fed may be forced to limit its bond buying program.
“Based on our analyses, interest rates have historically moved up on average seven months ahead of the Fed’s first tightening move,” the analysts added. “Therefore, we continue to suggest keeping portfolio duration in the short to intermediate range and emphasizing high quality credit over long maturity Treasuries.”
For more information on fixed-income assets, visit our bond ETFs category.
Max Chen contributed to this article.