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https://morningstar.com/funds/how-largest-bond-funds-did-q2-2025Bond returns cooled in the second quarter, as investors worried about the inflationary impact of tariffs and the growing federal budget deficit.
The actively managed Vanguard Short-Term Investment-Grade Bond Fund outperformed, while the PIMCO Total Return Fund fell behind its peers.
The Vanguard Intermediate-Term Corporate Bond ETF ranked in the top decile of its category, while the iShares 20+ Year Treasury Bond ETF lagged.
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https://www.nytimes.com/2025/06/27/opinion/trump-budget-big-beautiful-bill.html
https://www.nytimes.com/2025/06/27/opinion/trump-budget-big-beautiful-bill.html?unlocked_article_code=1.Tk8.wSgs.OFKFM1hFVG9H&smid=url-share
Old_Joe?
"The Republican Party controls both houses of Congress and the White House. Mr. Trump and his allies have the power to deliver a fiscally responsible plan. Instead, they are playing make-believe.
A small number of Senate Republicans have expressed reservations about this situation. Senator Rick Scott of Florida has said the projected growth in the debt is “fiscal insanity,” and Senator Ron Johnson of Wisconsin has called it “unacceptable.” They’re right about that much. The refusal to confront America’s fiscal problems has a price, and it is rising rapidly."
only when Democrats controlled the executive branch.
Oh, how they wailed obsessingly about fiscal rectitude!
"Three times in the past half-century, Republicans have enacted large tax cuts
that necessitated significant increases in federal borrowing.
Each time they insisted the cuts would drive economic growth, even claiming
that the expansion would be so large that the government would collect more tax revenue.
Each time, they’ve been proved wrong."
"Mr. Trump’s bill would be the fourth iteration of this failed experiment,
and some Republicans are still retailing the same fantasies about the consequences.
'This will reduce the deficit, not increase it,' Senator John Thune of South Dakota,
the Senate majority leader, said last week. That is simply false."
While I personally don’t subscribe to New York Times, but I have access through our local public library.
@Observant1 and @DrVenture, what investment opportunities do you see?
This is all in regards to the short and medium term.
Obviously, the debt/deficit and inflation are on people's minds right now. The long term. And we KNOW that Trump will insert his agent into the FED in mid-2026 and try to push rates down significantly. I believe this has two implications, That inflation may gain a foothold and could become a problem. And that it will probably help existing bond fund prices.
There are a lot of plates spinning. Caution and FOMO are battling it out. My totally unqualified view is that the second half of 2025 could be decent, IF jobs and inflation do not deteriorate too much. And if the FED cuts, the markets will be enthralled. Rate cuts should help tech, as they use debt heavily to finance growth. This, and the tight labor market might, offset any job losses. Inflation is the wild card, How does the FED deal with inflation, should it exceed 3%, and they have already cut rates? Do they let it run? Does a new Trump FED appointee appease, or do the right thing? From an investing standpoint, how do bonds and stocks react if the FED is forced to raise rates. Or fails to do so in the face of inflation?
As always, I am open to respectful disagreement and alternative opinion. And healthy debate.
With our retirement are coming up, we want to takes some equity risk of the table and focus on better multi-sector and foreign bonds, and not so much with treasury, especially long bond. In all cases, we are staying with short duration in light of inflation still lingering.
My concerns are the following :
1. Staginflation
2. Can US continue to finance its deficient by selling long bonds ? Bessent said her can takes care of that.
3. What will happen when on one would work on the fields and meat packing factories?