Huge borrowing is what is causing the economic malaise. People must save not spend. Only then economy would function. The governments must increase the taxes (on the upper end) rather than reduce. GWB had sown the seeds and if republicans come to office, they will reap the reward.
The low interest rates are because the FED and other banks are buying govt debt. Imagine that the FED had not bought the bonds, do you think we would be where we are? Any way, more and more papers are getting issued every year. Inflation or not, yields are going higher or remain around here.
The FED is not buying bonds. People have to come up with more and more money to buy the bonds. Corporations are making money. There is every reason to abandon short term bonds and buy stocks. Long term bonds may be here for a while before yields rise ultimately. High indebtedness means more demand for money and higher rates.
Ha, I spoke too soon may be! But I still think Walmart would be a better investment than the thirty year.
Why would anyone buy 30 year when walmart div yield is same and earnigs yield is twice that? It beats me. It will not last long!
Collapsing exports automatically mean that America is even more in red than previously thought. Contrary to everybody (!) I thing a bad economy means lower income for the govt and hence more bond issuance and a crashing bond market.
The only reason the bond yields are low is because the FED is sitting on a lot of bonds. No worries, the govt will be coming up with even more of the bonds and rates will be snowballing upwards in yield!
Janet and Dudley have confirmed.
And then they would say that further increases would be data dependent. Stocks will go up and 30 year will be a yo yo for the next 1 month around 3%
Make no mistake, the rates not going to go down. Supply will be overwhelming. Low oil prices would keep the economy humming. TLT will be below 115 by the end of the year!
Dude, You could be wrong. I think there is a liquidity issue. What I think is happening is that people are not having any money to buy anything. And I think those who have money are not buying anything. I think US treasury may do well for a little longer but the bottom will fall off because there would not be money to buy 1 Trillion dollar of bonds every year!
I think damage was done long ago by Bush giving tax breaks for the rich and by Bernanke swiping out all those bonds from the market. The market is running without that stabilizing fly wheel. We are going lower in the stock market and ultimately on TLT as well.