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Newsroom
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HL Insight
We might be at or near peak interest rates, and US treasury supply is impacting bond prices. With that in mind, we look at the appeal of government bonds in the current market.
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
Published on 9 November 2023
It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.
Without hindsight, you can never be sure exactly when interest rates have hit their peak. While this is usually true, it feels reasonable to say that if we aren’t at the peak right now, we’re close to it.
Both the Bank of England (BoE) and the Federal Reserve (Fed) have kept rates at the same level in their last two meetings, having previously increased rates 14 and 11 times in a row respectively.
These rate hikes have caused government bond yields to rise, with the 10-year US treasury yield recently topping 5% (its highest since 2007) and 10-year UK gilts consistently yielding 4.2 – 4.7% over the last few months.
Just because the BoE and Fed haven’t increased rates at their last two meetings, doesn’t mean that rates won’t go up again from here.
Particularly in the US where the economy
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