Demand For Bond Market In King
Category:
State:
Multi-State
County:
King
Control #:
US-00415BG
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Word;
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Description
A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
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As demand for bonds increases, so do bond prices and bondholder returns. While cash yields are certainly attractive today, fixed income assets have historically outperformed cash when the Fed stopped raising rates.Investors suddenly awoke to a wicked brew of stubborn inflation, tight labor markets, monetary tightening and seemingly endless federal borrowing. Investors maximize return over a horizon at least as long as the longest term security outstanding. However, in the late 1920s, the demand for municipal bonds plunged dramatically, while in the mid1940s, corporate bond's demand went downhill.
