2 Factors Keeping a Lid on Interest Rates
Despite talk of an imminent sharp rise in interest rates, the yield on the 10-year Treasury note is back below 2%. This is more evidence that the much vaunted “Great Rotation” out of bonds has yet to occur. (Otherwise, bond prices would have fallen and yields would have gone up.) The great rotation was always more myth than reality. In fact, the fuel for the equity rally has been coming out of cash, not out of bonds being sold. We had more evidence of that last week. Fund flows for the week ending March 20th were up another $2.6 billion for stocks, a slowdown from previous weeks, while bond flows were substantially higher, up $3.7 billion on the week, according to BlackRock data. Normally, when the economy is improving – even if the pace is relatively slow – that environment should support interest rates rising. But right now there are [...] Click here to read the original article on ETFdb.com. Related Posts: Hunt For Yield: How Do All The High Yielding ETFs Stack Up Bond ETFs For Every Objective The New Fixed Income World Three “Dividend ETFs” That Go Beyond Stocks iShares Launches More High Yield ETFs (GHYG, IYLD)
Despite talk of an imminent sharp rise in interest rates, the yield on the 10-year Treasury note is back below 2%. This is more evidence that the much vaunted “Great Rotation” out of bonds has yet to occur. (Otherwise, bond prices would have fallen and yields would have gone up.) The great rotation was always more myth than reality. In fact, the fuel for the equity rally has been coming out of cash, not out of bonds being sold. We had more evidence of that last week. Fund flows for the week ending March 20th were up another $2.6 billion for stocks, a slowdown from previous weeks, while bond flows were substantially higher, up $3.7 billion on the week, according to BlackRock data. Normally, when the economy is improving – even if the pace is relatively slow – that environment should support interest rates rising. But right now there are [...]

Click here to read the original article on ETFdb.com.

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