Investing in a volatile bond market

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More than six years ago, the Federal Reserve moved its target fed funds rate to 0%, an unprecedented move, and just one part of a broad effort to keep interest rates low and stimulate the economy. Ever since then, some investors have worried about what would happen to bonds when the Fed reversed course and raised rates.

That day seems to be coming closer. With the U.S. economy improving and unemployment dropping, the Fed is weighing when to raise the key fed funds rate. At the same time, the markets have become more volatile.

What does this shifting investment backdrop mean for you? The answer depends on why you own bonds—and how sensitive you are to possible price fluctuations. Here are some of our recent insights on the bond market, the outlook for rates, and some strategies to consider, depending on your particular needs.

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