Basic Question Re: Spike In Rates on 10-Yr Treasuries

[Vincenzo Corleone]

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[twaddle]

Here's a simple picture that shows the different components that comprise a bond's yield:

Bond holders will sell if the expectations (real rate ~= economic growth, inflation) start to rise, which in turn will cause those yields to rise. You can sort of break out those two components by looking at nominals vs TIPS.

And the term premium increases as uncertainty increases.

 

[jurgs01]

Things go the way they should, until they don't...