Interest Rates

[lawman]

I don't understand why 10 treasury yields closed down at 2.817% today..Very recently they were over 3%. Does the market think rates will not go as high as expected?

 

[Dtail]

Wondering myself.

 

[Freedom56]

It's both a flight to safety and the fact that the bond market understands that with over 30 trillion in national debt and climbing, so much corporate and consumer debt, they can only raise interest rates so much. As investors, you want yields that at least keep pace with inflation. Inflation will not remain over 8% for long periods of time. Consumers and businesses will pull back on spending. However, I do see inflation in the 4-5% range moving forward which means that investments that yield less than inflation rates are counter-productive.

 

[Montecfo]

Freedom, I like your insights, but if inflation continues to rage, the 10 year will reflect that no matter what the Fed does.

In my opinion, It is really about longer term expectations for inflation-it is a 10 year instrument.

The market appears to believe inflation will be controlled in relatively short order.

Or so it seems from here.

 

[lawman]

It's really causing me to second guess my decision to sell my investment grade bond fund which is yielding around 4.5%. Probably another example of selling at the very bottom..

 

[COcheesehead]

Rates are market driven. People sold bonds - especially funds - like they were going out of style, now want to buy them back as the yields became more attractive and the risk of equities just dawned on them.

 

[aja8888]

Rates are market driven. People sold bonds - especially funds - like they were going out of style, now want to buy them back as the yields became more attractive and the risk of equities just dawned on them.

The FED is not through yet raising rates. What they have done so far has been ineffective (0.75%). We are in the early innings of more equity pain.

 

[COcheesehead]

The FED is not through yet raising rates. What they have done so far has been ineffective (0.75%). We are in the early innings of more equity pain.

I agree, we have likely more downside in equities.

 

[corn18]

Rates are market driven. People sold bonds - especially funds - like they were going out of style, now want to buy them back as the yields became more attractive and the risk of equities just dawned on them.

This. It really is as simple as supply and demand. Folks buy bonds, price goes up, yield goes down. Trying to figure out why they want to buy bonds is folly. Why do people want to buy dogecoin?