Relatively high yields mean investors who have been focusing on short-term securities wouldn't need to sacrifice much yield if they chose MBS to help limit their reinvestment risk.
Central bank monetary policy may soon ease, but government fiscal policies that increase the federal deficit could limit the decline in Treasury yields.
Investment-grade corporate bonds remain attractive given their lower risk and relatively high yields. Long-term investors who can handle volatility might consider high-yield bonds and preferred securities, but we wouldn't suggest large positions in either.
Federal agency bonds generally carry the same high credit rating as U.S. Treasuries, yet can sometimes offer slightly higher yields. Here's what to consider.