Bonds are off to a rough start in 2022. The Bloomberg US Aggregate Bond Index, the proxy for core US bonds, has declined nearly 6% in the first three months of 2022. This loss is compounded by those from 2021, when the index returned - 1.5% for the year.1
Bond investors have been schooled in the simple principle that when interest rates go up, bond prices go down.
Going forward, as the Fed (Federal Reserve) embarks on an aggressive path to tame inflation by raising interest rates, investors may be left wondering whether they should simply bai on bonds.