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Bonds & Duration

  • 04-11-2019 4:50pm
    Registered Users Posts: 1,298 ✭✭✭ RedRochey

    Given that the higher the duration, the more a bond's price will drop as interest rates rise (and vice versa), surely most bond funds should have high durations since interest rates will more likely fall in the future?


  • Registered Users Posts: 11,137 ✭✭✭✭ Geuze

    Interest rates will more likely fall?

    They are already very low in EA, Japan, Switz and UK.

    You expect them to fall further?

  • Registered Users Posts: 1,298 ✭✭✭ RedRochey

    Well in the US anyway they are predicting another rate cut next year

    And in the UK 2 members of the BOE wanted to cut rates yesterday