The pressure on bonds is going to create liquidity in the marketplace: Expert
Advisor Group chief strategist Phil Blancato provides insight on the stock market on ‘Making Money.’
As record-high inflation and volatile markets hit the U.S. economy, families and retirees are looking for safer avenues to invest their money.
Starting in the 1930s under President Franklin D Roosevelt, government bonds were issued after the financial collapse of the Great Depression to incentivize Americans to save money in government-backed investments. When America entered World War II, Series E Bonds, or defense bonds, were used to finance the rapid industrialization of America's war effort.
After the war, families bought saving bonds, hoping they would gain in value over time, using the money to help buy a house or eventually retire. As of 2012, paper savings bonds were no longer issued by the Treasury Department and became exclusively available via online purchases or electronic forms.
What is a savings bond?
The federal government guarantees savings bonds with "full faith and credit." The public funds raised from these investments are used to fund federal spending and projects used to manage the country's economy. The bonds are loans the government takes out from the public, which it promises to pay back at a certain date. Moreover, the government pays interest to bondholders after selling the investments.