> Will bond price crash when fed increases interest rate?

Will bond price crash when fed increases interest rate?

Posted at: 2014-12-05 
Bond prices include the idea that the Fed will raise interest rates. The deal is that the Fed has to raise interest rates faster than the forward rates in the term structure imply for bonds to crash.

"if everyone knows the interest rate is going to increase within 1 year max?"

I know many orders of magnitude more about bonds than you could know if you spent the rest of your life trying and I don't know this.

I never pay attention to things like that. I have fund managers who move the money for a fee and get me a nice return. I don't know much, that is why I hire manager through my funds to put my money where it will do the most good. Markets go up, they go down, it is the nature of the beast. When I was doing my own managing, I did dollar cost averaging. When the S&P 500 crashed to 900, I bought as much as I could afford, it now hovers at 1900. Many people get all panicky and sell at the lows. I assume they also wait till there are no sales at their favorite stores, the same thing actually. Fear is the Mind Killer!

The Fed. said, they will raise rates the begining of

next year or the middle of next year or even longer.

Huh?

Yes you can expect bonds to crash and maybe even the

stock market.

Yes bond prices will go down once the FED raises the interest rates

Many of those stupid people are "worth" a lot more than you, me, and the next 200 visitors to this site.