In the financial markets, stocks usually get all the attention. This year, however, stocks have had to share the spotlight with cash investments – CDs, Treasury Bills, and the like.

Many have seen the pictures of the enduring traffic jams at shipping ports and noticed the closed signs in the windows of restaurants in the afternoon. Supply constraints and labor shortages coupled with what seems to be insatiable consumer demand appear to have brought back inflation after a long hiatus, at least temporarily. But as inflation rises, so too do the interest rates on newly issued Series I Savings Bonds, creating an opportunity for investors seeking low-risk alternatives for cash.

A year ago, what had been a localized virus in a distant place spread across the world. Prior viral outbreaks – SARS, Ebola, Zika - never spread as feared. However, this one ended up being different. The world has certainly changed in the last twelve months, and the financial markets have shown they remain resilient to new challenges.

Interest rates have risen to start the year. After the yield on the 10-year Treasury reached a nadir of 0.5% basis points during the depths of the pandemic, it recently touched 1.5% - a level not seen since February of 2020.

Money in a bank account isn’t earning much these days. In fact, cash has barely outpaced inflation since 1926. History suggests that today’s low return prospects for cash are not all that different from the returns of the past century.

This year, the yield on a 10-Year Treasury bond reached a new all-time record low of 0.50%. In 1980, the same bond yielded 15%. The secular decline in interest rates provided a tailwind to bond performance over the last 40 years. For most baby boomers and following generations, yields have declined for most of their working life. Now that bond yields have approached zero, have we finally reached the end of this ride? That may be the wrong question.

In less than two months, the United States will head to the polls in what will be a divisive election in the middle of a pandemic and economic recession. The barrage of political ads is underway. We are constantly bombarded on TV, social media, and directly on our phones. The political noise is deafening and, between now and November, it's likely to get worse.