Most people associate the term investments with stocks and mutual funds, but Federal bond issues also constitute a major chunk of the overall investments market. The annual turnover of US Federal Bond issues is many times more than that generated by the collective stock markets. Although considered the safest investment options in the US, Federal Bonds are not free from obscurity. The following information will help you understand the basics of these bonds.
How and why they are issued?
The main organization that coordinates Federal bond issues is the Central Bank, which first conducts a market survey to assess the current investment needs of investors. This survey involves consultations with various entities like investment dealers, banks, and other financial organizations that are experienced in handling Federal bond issues. Before introducing the bonds in the market, the Federal government needs to determine their exact purpose, which may be for constructing a new road or bridge, refunding government debt or for funding some other project that is designed to serve national taxpayers or some other federal constituents. In addition, the Federal government has also...