Clinton Bond

AAA

DEFINITION of 'Clinton Bond'

A debt investment that is said to have no principal, no interest and no maturity value. A Clinton bond is in reference to President Bill Clinton's low-interest-rate policies that had bondholders lose billions of dollars early in his presidency. Inflation fears caused yields to increase temporarily, and the bond market collapsed. These fears were unfounded, however, with Clinton choosing to balance the budget instead of increasing the federal deficit, allowing bond prices to recover.

INVESTOPEDIA EXPLAINS 'Clinton Bond'

Former President Bill Clinton's well-documented "extravagances" formed the foundation for this type of bond. Clinton bonds are also known as "Quayle bonds", named after former Vice-President Dan Quayle. This rarely seen slang term is more often used to make a point, than to actually represent a market bond.

RELATED TERMS
  1. Obamanomics

    A buzzword used to describe the economic philosophies of United ...
  2. Interest

    1. The charge for the privilege of borrowing money, typically ...
  3. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Principal

    1. The amount borrowed or the amount still owed on a loan, separate ...
  6. A Ton Of Money

    A slang term used to describe a significant amount of money. ...
Related Articles
  1. Bonds & Fixed Income

    Coping With Inflation Risk

    Inflation is less dramatic than a crash, but it can be more devastating to your portfolio.
  2. thinkstock|istock
    Economics

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  3. Bonds & Fixed Income

    How Bond Market Pricing Works

    Learn the basic rules that govern how bond prices are determined.
  4. Mutual Funds & ETFs

    The Bond Market: A Look Back

    Find out how fixed-income investments evolved in the past century and what it means today.
  5. Bonds & Fixed Income

    Why Bad Bonds Get Good Ratings

    Credit ratings are not the only tool to rely on when assessing bonds. Find out why they sometimes fall short.
  6. Economics

    What You Should Know About Inflation

    Find out how this figure relates to your investment portfolio.
  7. Investing Basics

    Interest Rates And Your Bond Investments

    By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it.
  8. Investing

    Who are the key players in the bond market?

    The bond market can essentially be broken down into three main groups: issuers, underwriters and purchasers. The issuers sell bonds or other debt instruments in the bond market to fund the operations ...
  9. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  10. Options & Futures

    Writing Covered Calls On ETFs

    The strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center