Can someone explain why bond yields are going up? Normally you'd expect people to be investing in safer assets (eg. bonds) during times of crises, especially with the Fed slashing interest rates and embarking on QE.
A natural explanation is that the government is considered less creditworthy.
There's also been news this morning that the government will bail out commercial paper and corporate bonds, and that this has caused investors to move from treasuries to corporates.
I too am interested in this. My uneducated guess is that there are very severe liquidity issues, so everything and anything is getting sold. Isn't that why the Fed is doing the repo operations?
And I guess another possibility is that the US is already running a large deficit, and that is probably going to get much worse shortly. So maybe some are losing faith in the safety of treasuries?
I certainly would like to hear from others on this.
beefman|6 years ago
There's also been news this morning that the government will bail out commercial paper and corporate bonds, and that this has caused investors to move from treasuries to corporates.
It strikes me that both explanations may be true.
qqqwerty|6 years ago
And I guess another possibility is that the US is already running a large deficit, and that is probably going to get much worse shortly. So maybe some are losing faith in the safety of treasuries?
I certainly would like to hear from others on this.
unknown|6 years ago
[deleted]
jajag|6 years ago