US Central Bank Authorizes Bond Forwards for 10-15 Year State Bonds

Investment-grade bonds generally have high correlations with U.S. Treasuries and lower volatility than commonly assumed, except during periods of severe market stress. High-yield bonds, while often perceived as riskier, have actually shown less volatility than investment-grade bonds for most of this century, largely due to their shorter durations. Market conditions, such as the onset of the pandemic or sharp equity sell-offs, can temporarily invert these trends, making investment-grade instruments more volatile. Understanding these correlation patterns and duration effects is crucial for investors seeking to balance risk and return in their fixed income portfolios.