Bond market participants eagerly watch the words and actions of the Federal Reserve for hints about the future direction of interest rates. Expectations about Fed activity have shifted significantly since the fourth quarter of last year. While actions by the Fed can have an impact on markets in the short run, we believe long-term investors should stay focused on the long-term trajectory of the Fed, rather than on short-term interest rate trends. Learn strategies for balancing your portfolio in light of Fed projections here.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC. Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company. Investments in fixed-income securities are subject to market, interest rate, credit and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond’s price. Credit risk is the risk that an issuer will default on payments of interest and/or principal. This risk is heightened in lower rated bonds. If sold prior to maturity, fixed income securities are subject to market risk. All fixed income investments may be worth less than their original cost upon redemption or maturity.