A surge in bond yields may have ripple effects outside Wall Street, as home ownership costs rise and nest eggs shrink. Consumers have started to feel the pinch of rises in rates that are closely linked to the bond market, and the recent warning from Greenspan of a bond bubble is still in play. It is unclear when bond yields will top out. The 10-year yield inched toward 3 percent before edging lower at the end of February.
Markets reacted strongly to a brief inflation scare in early February. While Fed officials generally believe in the Phillips Curve, which predicts that falling unemployment acts as a push for inflation, that hasn't been the case throughout the recovery. The Fed continues to lag its 2 percent inflation target.
In the midst of all of this uncertainty, Retirees must protect their future from continued increases in cost of living and medical care. Safe Money Strategies including annuities and Long-term care coverage are becoming ever more critical components in retirement planning. Feel free to contact me to review the available options that would make the most sense in your situation.
