Bond Banking Aftershock

All the banking turmoil—both real and perceived—sent waves through the bond market. Two-year U.S. treasury bonds experienced a 1.2% rate drop over five trading days. Depending on how you look at it, this was the largest decline in rates since 1987, or the biggest gain short-term gains for investors holding government bonds in their portfolios. Traders reported that the markets had snarled, causing buyers and sellers to wait minutes between transactions.

The strong rally in government bonds will probably last as long as investors are nervous about the safety and soundness of the financial system, which could be days, weeks or months, depending on the headlines. Meanwhile, the bond parts of diversified portfolios gained value as stock prices declined, which is precisely the offsetting behavior that one would want to happen in uncertain markets.



Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 5280 CARROLL CANYON ROAD, SUITE 300, SAN DIEGO CA, 92121, 619-6846400. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. LIVING LEGACY FINANCIAL INSURANCE SERVICES LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through WestPac Wealth Partners and Insurance Services, LLC, a DBA of WestPac Wealth Partners, LLC. CA Insurance License Number – 0F64319, AR Insurance License Number – 9233390. | 2023-153171 Exp. 03/25 | This article was written by an independent third party. It is provided for informational and educational purposes only. The views and opinions expressed herein may not be those of Guardian Life Insurance Company of America (Guardian) or any of its subsidiaries or affiliates. Guardian does not verify and does not guarantee the accuracy or completeness of the information or opinions presented herein.  Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. | Past performance is not a guarantee of future results. All investments contain risk and may lose value. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit and inflation risk.