Living on the Edge
There were two overarching themes that drove bond market performance in May — the debt ceiling and the possibility of a Fed pause in June. The former issue was finally settled just as the month closed out, while the latter is now the dominant theme until June 14 when the next FOMC meeting concludes. During the month, most bond yields rose by 25-50 basis points, leaving total returns in negative territory for the period. Total returns for the Bloomberg U.S. Intermediate Aggregate Index and the Bloomberg Municipal Index were -0.73% and -0.87% respectively.
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