Fixed Income Quarterly: Fairly Tales

2014 began much the same way as investors fervently hid from interest rate volatility. The previous year’s significant rate decline surprised nearly every market participant and commentator. However, during 2014, 30-year Treasury bond yields fell 1.22 percent and provided a total return of more than 29 percent. As interest rates slid to near historic lows, investors became increasingly comfortable with the low-rate environment. Investors’ sanguine attitude combined with the ultra-loose worldwide monetary policy allowed chief financial officers to issue a record number of corporate bonds. This white paper provides a quarterly market analysis and addresses the potential outcome for fixed-income investors.