Demand For Bonds Factors In Washington
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An expansion will cause the bond supply curve to shift right, which alone will decrease bond prices (increase the interest rate). But expansions also cause the demand for bonds to increase (the bond demand curve to shift right), which has the effect of increasing bond prices (and hence lowering bond yields).
The demand curve for bonds shifts due to changes in wealth, expected relative returns, risk, and liquidity. Wealth, returns, and liquidity are positively related to demand; risk is inversely related to demand. Wealth sets the general level of demand.
Four determinants -wealth, expected return, risk, and liquidity -are evaluated for a given bond relative to an alter- native asset. The impact that a change in these determinants has on bond supply and demand is obvious (Table 1). ... of these factors changes the position of the supply curve (Table 1).
Clearly, two major factors will affect return expectations and hence the demand for certain financial assets, like bonds: expected interest rates and, via the Fisher Equation, expected inflation.
While you can buy Treasurys like T-bonds directly from the source — the U.S. government, through TreasuryDirect — one of the most common ways people add them to their portfolio is by investing in Treasury exchange-traded funds or mutual funds through bank, brokerage or retirement accounts.
Bonds and/or certificates may only be purchased through a municipal securities broker-dealer. Refer to the Official Statement for complete information on each issue.
Typically, there are two ways you can buy municipal bonds, both through a brokerage or advisor: Primary market purchases: Buying directly from the issuer (a local government, for instance) Secondary market purchases: Buying from another investor (think of it as buying a pre-owned item versus a brand-new one)
In Washington, general contractors who are licensed and bonded can perform most types of work and can hire subcontractors for specialty jobs. General contractors are required to hold a $30,000 bond while specialty contractors must hold a $15,000 bond.
Bloomberg provides current and historical bond ratings. S&P Capital IQ provides current and historical bond ratings for corporate bonds. Select the corporation, then "Credit Ratings" under the Fixed Income subject heading on the left side of the page.
