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Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Higher for longer. The Federal Reserve will likely maintain higher interest rates and remain open to another rate hike. Borrowing costs for households, businesses and governments have risen with soaring rates.

Inflation remains sticky…yet growth in the U.S. economy remains resilient.

The government will likely increase the supply of government bonds and bills to cover the widening deficits.

The national average 30-year mortgage rate just climbed over 8%, nearly doubling the 4.26% average over the past 10 years. This would take a $300,000 30-year monthly loan payment of $1,477 up 49% to $2,201. New car financing rates are at 6.6%. The amount of credit card debt outstanding just hit an all-time high sitting 36% higher than the 20-year average and increasing in size for 10 of the last 12 months reported. Student loan borrowers are now being called upon to pay. Food, gas and other staples cost more at a time when mortgage/rent, auto payments and mounting credit card debt are eating away at monthly disposable income.

Geopolitical restlessness is skyrocketing. The world affairs seem as unsettled as they’ve been in this lifetime.

Yet…there is one thing that is certain within the investment world. Interest rates are higher than they have been in over 16 years and income opportunities for individual bond buyers are abundant. Take advantage of these opportunities while you can.

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The author of this material is a Trader in the Fixed Income Department of Raymond James & Associates (RJA), and is not an Analyst. Any opinions expressed may differ from opinions expressed by other departments of RJA, including our Equity Research Department, and are subject to change without notice. The data and information contained herein was obtained from sources considered to be reliable, but RJA does not guarantee its accuracy and/or completeness. Neither the information nor any opinions expressed constitute a solicitation for the purchase or sale of any security referred to herein. This material may include analysis of sectors, securities and/or derivatives that RJA may have positions, long or short, held proprietarily. RJA or its affiliates may execute transactions which may not be consistent with the report’s conclusions. RJA may also have performed investment banking services for the issuers of such securities. Investors should discuss the risks inherent in bonds with their Raymond James Financial Advisor. Risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration. Past performance is no assurance of future results.

Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.

To learn more about the risks and rewards of investing in fixed income, access the Financial Industry Regulatory Authority’s website at finra.org/investors/learn-to-invest/types-investments/bonds and the Municipal Securities Rulemaking Board’s (MSRB) Electronic Municipal Market Access System (EMMA) at emma.msrb.org.