Federal Funds rate and the F Fund


Q. The Federal Reserve Bank has indicated it will begin increasing the Federal Funds Rate this year. How much of an impact (decrease in value) will this have on the F Fund (U.S. bonds)?

A. It’s impossible to say exactly, since the F Fund is composed a variety of types of bonds. In general, you should expect rising interest rates to drive down the market value of bonds, particularly treasury debt — but reasonable expectations are not always fulfilled.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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