Are bond yields still attractive?

Bond yields are currently at levels we haven't seen in quite some time, which has significant implications for investors' portfolios and income strategies. Understanding how today's yields compare to historical norms can help provide valuable perspective when making fixed income investment decisions. Here are some relevant facts:

• The 10-year Treasury yield is currently around 4.3% while the 2-year Treasury yield is at 3.8%, both well above their historical averages.

• Corporate bonds are offering attractive income opportunities across the risk spectrum, with AAA-rated bonds yielding 4.9% and riskier CCC-rated bonds yielding 12.2% as of mid-April.

• Real yields (bond yields minus inflation) are at their highest levels in over a decade, providing better income potential for long-term investors, especially those in retirement.

The included chart showing historical interest rates helps illustrate how today's yields compare to previous decades. While current rates are higher than we've seen in the past 10-15 years, they remain well below the levels experienced in the 1970s and 1980s, providing important historical context for today's bond market environment.

While short-term market fluctuations may continue, these higher bond yields represent a meaningful shift in the fixed income landscape that creates opportunities for investors focused on long-term financial goals rather than reacting to temporary market movements.