Why are Treasury yields rising?
Personal savings are rising and retail sales are flat to down. Unemployment is rising. All this should be massively deflationary. Interest rates should be falling or at least not rising. But a funny thing is happening. In the past two months, the yield on the ten-year bond has risen by over 1%. According to Merrill Lynch, the size of the world bond market is estimated to be approximately $67 trillion, with the shares of US, Euroland, and Japanese securities each representing less than 50 percent of this total. England has been put on negative watch for its AAA rating. We think the bond market is looking at the mountain of debt that will have to be somehow sold and wondering where such a colossal sum will come from. Where do you find $10 trillion in the next ten years for US debt? And that is just for US government debt. $5 trillion for new global debt in the next two years? In a deleveraged world? How much will the other countries need? What about money needed for businesses and mortga
Related Questions
- Required use of Board-published Treasury security yields. May a lender use Treasury yields other than those in the Boards table, "Treasury Securities of Comparable Maturity under Regulation C"?
- Where does the market expect 10-year U.S. Treasury yields to be in a year?
- Are the CMT rates the same as the yields on actual Treasury securities?
