In other words, the Fed is keeping interest rates low for an unspecified period, which some speculate to be mid-2015. This was interpreted as a win for both the bond and the stock markets for now, with both reacting favorably to the news.
Bonds have generally flattened out over the past two weeks with prices trading in a narrow range. Lower-quality convertible and high-yield (junk) bonds lead the bond market this past week with the Barclays U.S. Convertible Bond index gaining 1.29 percent and the Barclays High Yield Very Liquid index rising 0.43 percent over the same period.
This article was written byLaif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH). This commentary originally published in the Reno Gazette-Journal. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.