Investment grade yield

Corporate yields are extremely low considering 10 year treasuries are still hovering around 1.6%. This yield clearly shows an inverse relationship with American Equity values.

What does all this mean? The world investor clearly has faith in the American Dollar and Financial system. While it is one thing for Treasuries to have low yield, it is another when both treasuries and corporate bonds are low in unison. The balance sheet for both the treasury and corporations must be looking good.

There is one area of concern though. MBS loans have been gobbled up by the Feds. Thus leaving little room outside of treasuries and corporate bonds for fixed investments. In essence, the Fed’s purchases may continue to force investors to invest in risky assets such as Corporate debt as opposed to collateralized obligations.

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