Bond Pros: Where To Ride Out A Jittery Market

Bond pros are jittery. The bull market culminated in late 1993 with the 30-year Treasury bond yielding 5.75%. Since then, bonds have been relatively flat, trading between 6.25% to 7.25% for the past two years. But within that range, you can still get some stomach-churning volatility. In fact, with the U.S. economy deep into one of the longest economic expansions on record, any news even slightly hinting at rising inflation can send the market into a tizzy. On Oct. 8, when Federal Reserve Board Chairman Alan Greenspan said the economy "has been on an unsustainable track," bond prices plunged, pushing the long-bond yield up 15 basis points, to 6.37%, in one day. Days before, tensions between Iran and Iraq sparked fear of rising oil prices and another yield upsurge.

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