A Visual Guide to Bond Market Dynamics
A Visual Guide to Bond Market Dynamics
Bond markets have been rattled given recent events in the banking industry.
The good news is that the Federal Reserve, U.S. Treasury, and Federal Deposit Insurance Corporation are taking action to restore confidence and take the appropriate measures to help provide stability in the market.
With this in mind, the above infographic from New York Life Investments looks at the factors that impact bonds, how different types of bonds have historically performed across market environments, and the current bond market volatility in a broader context.
Bond Market Returns
Bonds had a historic year in 2022, posting one of the worst returns ever recorded.
As interest rates rose at the fastest pace in 40 years, it pushed bond prices lower due to their inverse relationship. In a rare year, bonds dropped 13%.
| Year | Bloomberg U.S. Aggregate Bond Index Total Return |
|---|---|
| 2022 | -13.0% |
| 2021 | -1.5% |
| 2020 | 8.7% |
| 2019 | 7.5% |
| 2018 | 0.0% |
| 2017 | 3.5% |
| 2016 | 2.7% |
| 2015 | 0.6% |
| 2014 | 6.0% |
| 2013 | -2.0% |
| 2012 | 4.2% |
| 2011 | 7.8% |
| 2010 | 6.5% |
| 2009 | 5.9% |
| 2008 | 5.2% |
| 2007 | 7.0% |
| 2006 | 4.3% |
| 2005 | 2.4% |
| 2004 | 4.3% |
| 2003 | 4.1% |
| 2002 | 10.3% |
| 2001 | 8.4% |
| 2001 | 8.4% |
| 2000 | 11.6% |
| 1999 | -0.8% |
| 1998 | 8.7% |
| 1997 | 9.7% |
| 1996 | 3.6% |
| 1995 | 18.5% |
| 1994 | -2.9% |
| 1993 | 9.8% |
| 1992 | 7.4% |
| 1991 | 16.0% |
| 1990 | 9.0% |
| 1989 | 14.5% |
| 1988 | 7.9% |
| 1987 | 2.8% |
| (Read more...) |