The Federal Reserve raised interest rates to 3.75% to 4% and signaled one more increase by year-end. The 10-year Treasury yield reached approximately 4.95%, offering attractive buying opportunities for income investors. Investment-grade bonds and select high-yield securities with short maturities are preferred choices according to strategists. Municipal bonds, exempt from federal and sometimes local taxes, also represent an attractive option with a duration of about six years. A return to a traditional 60/40 allocation is not expected in the near term according to Goldman Sachs.
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