Exploring High-Yield Opportunities After the Fed’s Rate Cut

The Federal Reserve recently made headlines with another rate cut at its December meeting, trimming 25 basis points to bring the target range to 4.0% to 4.5%. Here’s what this means for you:

• Short-term rates stayed stable as the cut was already expected.
• Long-term yields edged up, driven by stronger-than-anticipated economic growth and stubborn inflation.
• The 20-year Treasury bond yield climbed to 4.686%, its highest since April.

Let’s dive into where you can still lock in yields of 6% or more.

Top Agency Bond Picks

Agency bonds are offering attractive yields, but many are callable. Here’s a quick breakdown:

1. Short-Term High Yield
2. Balanced Option
3. Long-Term Security

Tip: Callable bonds are ideal if you’re comfortable with early redemption or holding to maturity.

Corporate Bonds Yielding 6%+

Corporate bonds can push yields even higher. Consider these options:

1. Jefferies Financial Group
2. JP Morgan

Key Factors: Always review issuer credit ratings, purchase limits, and fees. Major platforms like Fidelity and Schwab often waive fees for new-issue bonds, but confirm with your broker.

Quick Recap

• Agency bonds offer secure options with varying call dates and yields.
• Corporate bonds provide higher yields but come with more risks.

For a deeper dive, check out our video tutorials on navigating bond platforms.

What’s Next?

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Here’s to a prosperous year ahead. Happy investing!