Retail investors should avoid shorting bonds or buying put options, which can cause severe losses. Instead, keep money in high-interest savings accounts where banks handle bond allocations. The Federal Reserve is unlikely to raise rates further despite inflation, since fiscal constraints and rising oil prices limit what monetary tightening can achieve.
Again, rather like going short in the futures market or buying put options, if you don't know what you're doing, you're going to get third-degree burns. So I suggest bonds are best left to holding cash in a deposit savings account, which is paying high interest, and let the bank work out the bonds that are needed to deliver, say, 3.8% rather than you trying to do it yourself. What's the Federal Reserve and interest rate scenario over here? Again, I don't want to gamble, but I suspect that most likely interest rates are not going to rise despite higher inflation from energy shocks. For economic reasons, inflation is hardly likely to be lowered by tightening monetary policy, i.e., high interest rates, on top of the fiscal policy strangulation we've just had. In other words, people are paying more, spending more. It's like they're being taxed by a higher oil price.
