Why lessons from 2004 suggest reasons for optimism on bonds

Impact of Fed policy

clock • 7 min read

Pinebridge Investments' Robert Vanden Assem and Jonathan Davis take a closer look at the impact of previous Federal Reserve interest rate rise cycles on bond markets.

Conventional wisdom suggests that bond markets are poised for a correction, but the lessons of 2004 suggest reasons for optimism.  While the relatively benign tightening of the past few years has little in common with previous rate hike cycles, that may change in 2017.  Although the Fed's expected long-term rate is significantly lower than that from the previous rate hike cycle (3% versus 5.25%), the five hikes announced from June 2004 through the end of the year are not far from the Federal Reserve's current forecast of three hikes in 2017, which the market does not expect to begin u...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Federated Hermes launches Global Short Duration Bond fund just as asset class booms

Federated Hermes launches Global Short Duration Bond fund just as asset class booms

Responding to ‘increased investor demand’

Eve Maddock-Jones
clock 25 June 2025 • 2 min read
Fixed income investment set to rise as bonds hit double digit growth in asset allocation

Fixed income investment set to rise as bonds hit double digit growth in asset allocation

Assets in fixed income up 11%

Patrick Brusnahan
clock 19 June 2025 • 3 min read
US GSS bond issuances falls to lowest level since 2017

US GSS bond issuances falls to lowest level since 2017

Down 25% amid political turmoil

clock 13 May 2025 • 3 min read
Trustpilot