Making the Bond Math Add Up
A Veteran Mutual Fund Manager Discusses His Approach to Fixed-Income Investing.
Carl Kaufman
The bond world has been quirky to say the least. Heading into 2024, the market was very confident that the Federal Reserve was about to pivot and start lowering short-term interest rates. Not so fast. While the Fed has signaled that additional rate hikes are unlikely, it has also suggested that rate cuts aren’t imminent — though many bond market observers still expect cuts to begin later this year.
Whenever rates do get cut, that should be positive for bonds. In theory at least, yields on existing bonds would look more attractive, pushing up their prices. Remember the bond yields and prices move in opposite directions. For some perspective on the bond market and what’s ahead, Income Matters Today spoke recently with Carl Kaufman, head of fixed income at Osterweis Capital Management in San Francisco. He also runs the Osterweis Strategic Income Fund (OSTIX), which has five stars from Morningstar. The link to our discussion is below.
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