Quantitative tightening is "an underappreciated risk" that might keep bond yields higher for longer. Auctions of 10- and 30-year Treasuries were poorly received this month, and supply will keep increasing, thanks to the widening budget deficit.
Yields on 10-year and 30-year Treasuries reached their highest since 2007, extending yield curve steepening which has been a key dynamic of the past month's abrupt selloff.
The impending barrage of T-bills is a precursor to a glut of longer-term debt issues, which might result in a "demand vacuum" for longer-maturity bonds that pushes yields higher and tightens financial conditions.
"The Fed is regaining their inflation credibility, slowly. As they get inflation closer to the target, their long-run rate will again serve as a credible anchor for yields."
The divide between investors with trillions at stake reflects just how tough monetary policy itself has become, as price pressures remain high and readings of headline and underlying inflation send mixed signals.
DebugScreen: mobile
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{
"uri": "/2024/01/19/seismic-shift-has-bond-traders-watching-yield-curves-moves/",
"title": "Seismic Shift Has Bond Traders Watching Yield Curve's Moves",
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"summary": "Though the how, why, and when remain murky, bond traders expect currently inverted Treasury yield curves to soon normalize.",
"body": null
},
{
"uri": "/2023/10/26/debt-investors-may-be-ready-to-start-buying-bonds-again/",
"title": "Debt Investors May Be Ready to Start Buying Bonds Again",
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"summary": "After a run of solid economic data, the rise in 10-year Treasuries' yield, to 5%, makes them attractive to embattled investors.",
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{
"uri": "/2023/10/25/bond-markets-vicious-cycle-risk-puts-spotlight-on-fed-qt/",
"title": "Bond Market's 'Vicious Cycle' Risk Puts Spotlight on Fed QT",
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"summary": "Quantitative tightening is \"an underappreciated risk\" that might keep bond yields higher for longer. Auctions of 10- and 30-year Treasuries were poorly received this month, and supply will keep increasing, thanks to the widening budget deficit.",
"body": null
},
{
"uri": "/2023/10/09/deepening-bond-rout-has-some-investors-favoring-the-short-end/",
"title": "Deepening Bond Rout Has Some Investors Favoring the Short End",
"byline": "Liz Capo McCormick & Michael Mackenzie",
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"prettyDate": "October 09, 2023",
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"summary": "Yields on 10-year and 30-year Treasuries reached their highest since 2007, extending yield curve steepening which has been a key dynamic of the past month's abrupt selloff.",
"body": null
},
{
"uri": "/2023/08/21/treasury-yields-hit-highest-level-since-2007/",
"title": "Treasury Yields Hit Highest Level Since 2007",
"byline": "Michael Mackenzie & Liz Capo McCormick",
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"prettyDate": "August 21, 2023",
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"summary": "Elevated rate fears drive continued bond-market selloff.",
"body": null
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{
"uri": "/2023/07/03/bonds-move-at-a-dizzying-pace/",
"title": "Bonds Move at a Dizzying Pace",
"byline": "Michael Mackenzie & Liz Capo McCormick",
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"summary": "Yields on 10-year Treasuries could exceed 4% in order to win over investors.",
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},
{
"uri": "/2023/06/26/a-deluge-of-government-debt-is-coming/",
"title": "A Deluge of Government Debt Is Coming",
"byline": "Liz Capo McCormick, Michael Mackenzie & Ruth Carson",
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"prettyDate": "June 26, 2023",
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"summary": "The impending barrage of T-bills is a precursor to a glut of longer-term debt issues, which might result in a \"demand vacuum\" for longer-maturity bonds that pushes yields higher and tightens financial conditions.",
"body": null
},
{
"uri": "/2023/06/06/bond-buyers-are-betting-the-fed-can-bring-back-a-low-rate-world/",
"title": "Bond Buyers Are Betting the Fed Can Bring Back a Low-Rate World",
"byline": "Liz Capo McCormick, Michael Mackenzie & Craig Torres",
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"summary": "\"The Fed is regaining their inflation credibility, slowly. As they get inflation closer to the target, their long-run rate will again serve as a credible anchor for yields.\"",
"body": null
},
{
"uri": "/2023/05/02/regional-bank-fears-spur-haven-buying/",
"title": "Regional Bank Fears Spur Haven Buying",
"byline": "Benjamin Purvis & Michael Mackenzie",
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"summary": "U.S. Treasuries surge, as investors seek out safer assets amid worries about U.S. banks and as economic data points to a softening labor market.",
"body": null
},
{
"uri": "/2023/04/25/worlds-biggest-money-managers-are-divided-over-inflations-path/",
"title": "World's Biggest Money Managers Are Divided over Inflation's Path",
"byline": "Alice Gledhill, Michael Mackenzie, Liz Capo McCormick & Rich Miller",
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"prettyDate": "April 25, 2023",
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"summary": "The divide between investors with trillions at stake reflects just how tough monetary policy itself has become, as price pressures remain high and readings of headline and underlying inflation send mixed signals.",
"body": null
}
]
}
}
