Surge Of Money From Bonds Could Stifle Lending

NEW YORK (AP, Matthew Craft) — Americans are leaving bond mutual funds at the fastest rate in more than two years.U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when…

NEW YORK (AP, Matthew Craft) — Americans are leaving bond mutual funds at the fastest rate in more than two years.

U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when financial markets were in free-fall. They pulled an average of almost $3 billion every week since Nov. 23, according to the Investment Company Institute. Prior to November, money had been flowing into bond funds every week for nearly two years.

“This is the real deal,” says Marilyn Cohen, founder of Envision Capital Management, which oversees $300 million in mostly fixed-income investments.

Read More…
More on Interest Rates