2 Question Tuesday – 08/08/2023 – What Does US Credit Downgrade Mean For The Economy & How Am I Getting 4% YTM on Bonds?

Welcome to 2 Question Tuesday. This week’s client submitted questions were:

  1. What does the Fitch downgrade of the U.S. credit rating mean for the economy?
  2. How am I getting a 4% yield to maturity on my bonds?

Phil, Mike, and Larry discuss what last week’s downgrade by Fitch Ratings of the government’s AAA credit rating to AA+ means to the economy and the safety of Treasury bonds. They then discuss the 10-year U.S. Treasury bond’s yield rising above 4% again. They then explain how if you buy a bond today with a 3.5% coupon you will receive a yield at maturity greater than 4%.

Submit your questions to question@2questiontuesday.com

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

Host Lawrence Carrel’s books available available at Amazon.com