January 2021 – Monthly Commentary

Risk/Reward valuation of the Bond Market

The Bloomberg U.S. Aggregate Bond index (Formerly the Barclays Aggregate Bond Index), the widely followed benchmark measure for the broad U.S. bond market, generated a total return of 7.51% last year.  That performance was primarily due to the Federal Reserve buying all manner of fixed income instruments.  The Fed has promised that their monetary manipulation will continue into the foreseeable future, but some members have raised the topic of tapering the purchases.