I just got a $10K bonus and wondered if I should put it in bonds, but the news paints a varied picture on yields

Recent reports highlight a surge in U.S. Treasury yields, generating mixed reactions among investors. Despite the rising yields, portfolio managers argue there are opportunities for investors to earn guaranteed income on bonuses like the $10,000 mentioned. Eric Kazatsky, a managing director at MacKay Shield, explains that high yields on bonds can be favorable.

He highlights that municipal bonds, in particular, are gaining attention due to their high yields and tax-exempt status. These bonds are currently offering yields close to 4%, allowing investors to earn a tax-free annual income. The article notes that municipal bonds have historically been more stable during economic crises, making them an attractive option in uncertain times.

The municipal bond market is projected to grow, with a record $57 billion in issuance expected. For a $10,000 bonus, investing in a tax-free municipal bond could provide a guaranteed $400 annual income, which is more favorable than the after-tax returns on taxable investments. While some investors may be concerned about the economic risks highlighted by the high yields, others see it as an opportunity to earn guaranteed income and support their local communities.