Treasury yields reached levels not seen since 2007 for the 10-year (5.179%) and since 2004 for the 30-year (5.469%). The Federal Reserve raised rates by a quarter point last week, with markets pricing in roughly a 70% chance of another hike in October according to the CME Group’s FedWatch tool. Amid bond market volatility, experts recommend focusing on short-duration bonds and floating-rate securities to minimize interest rate risk while capturing attractive yields. For investors willing to take on more credit risk, floating-rate bank loans offer yields above 7%, while the 5- to 7-year part of the curve represents the sweet spot for investment-grade bonds according to strategists.
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