Fixed Income Investment

You research has the following dimension: The author of the article “Why 2017 could be a good year for high-yield bond investors” suggests the U.S. economy will continue to strengthen in 2017. This may add to inflation and in turn compel the Federal Reserve to raise short-term interest rates. Nevertheless, David Berman reports PIMCO’s analysis indicates high-yield bonds actually do well when the U.S. Treasury bonds are increasing in yield (hence falling in prices). This would stem from stronger profits for the underlying companies in the portfolio. Your are required to research: a) The claim by PIMCO that junk-bonds do well when benchmark interest rates are rising (1 to 1.2 pg) Provide me with numbers or charts here (show the expected increase on interest rate and its affect on the performance of the junk bonds) b) Current expectations for the U.S. economy for 2017 and 2018. (.8 to 1 page)