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Economy

IbogaProject

(3,912 posts)

11. Yes the price shifts more the longer the bond duration

Reply to Mike 03 (Reply #9)

Sun Nov 24, 2024, 02:41 PM

Nov 24

The base rate is higher the longer the duration but the price shifts more when interest rates change. The price to purchase an ongoing bond has to change to give the same expected total yield. So if you have 25 years to go at 7% and the new bonds are yielding 6% for similar time your bond has to adjust in price to equalize the "effective yield" it will have to cost more.

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Can someone help me decipher this Bloomberg view [View all] Mike 03 Nov 22 OP

I think it's more a statement about inflation going forwardq bucolic_frolic Nov 22 #1

Thanks. Mike 03 Nov 24 #6

Here's an article from NPR Joinfortmill Nov 22 #2

Ooh, interesting! Mike 03 Nov 24 #7

Bonds go up when interest rates decline IbogaProject Nov 22 #3

Great information. Mike 03 Nov 24 #8

I don't know, but most interest rates have RISEN since the Fed's cuts nmmi Nov 22 #4

Exactly! Some of the anchors on Bloomberg were talking Mike 03 Nov 24 #9

Yes the price shifts more the longer the bond duration IbogaProject Nov 24 #11

I have a portion of my IRA in bond funds MichMan Nov 22 #5

That's interesting. Mike 03 Nov 24 #10

All bond funds purchased pre-inflation have been lackluster nmmi Nov 25 #12