The relationship between interest rates and bonds is a seesaw, and right now, the seesaw is tipping. Abe Abich discusses that as the Fed lowers interest rates, many Americans are questioning where to place their money. With $2 trillion recently funneled into money market accounts, the drop in rates has many looking at bonds as a potential investment. Short-term bonds, in particular, are gaining attention.

Abe highlights that although money market rates were over 5% and have now dipped to around 4%, inflation eats into these returns, leaving investors with minimal gains. He explains why it’s important to not hold excess cash, as it might lose value over time. Exploring bonds, the stock market, structured notes, and annuities could provide better growth opportunities as interest rates continue to decline.

 

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