![]() ![]() Shorter-Term Treasurys Gain After Data Showing Cooler Inflation Japanese Lender Reopens Market for Risky Bank BondsĪs Bond Market Turbulence Eases, Companies Borrow Again Treasury Yields Slide After Fed Rate Callĭebt-Ceiling Standoff Warps Treasury Trading Strong Labor Market Data Sparks Bond Selloff Investors Seek Protection in Case of Debt-Ceiling Debacle Munis on Edge as Debt Ceiling Deadline Nearsĭebt-Ceiling Fight Sends Investors Hunting for New Havens Treasury’s $1 Trillion Debt Deluge Threatens Market Calm Treasury Yields Rebound After Fed Signals Higher Rates AheadĬhinese Junk Bonds Are Back on the Trash Heap Wall Street Buys More T-Bills, Parks Less at Fed Junk-Bond Sales Are Up as Firms Submit to Tougher Terms Treasury Yields Resume Climb as Investors Bet on Growth Some Hospitals That Spent Big on Nurses Are Now Short on Cash How the Bank of Japan’s Shift Could Play Out in U.S. How Bond Funds Have Fared During the Fed’s Rate Hikes Investors Bet That High Rates Will Linger What Wall Street’s Top Recession Gauge Is Saying NowĬhina’s Largest Surviving Developer Hits Debt Crisis 3 Year Treasury Note TMUBMUSD03YĬhinese Corporate Bonds Are Sending a Surprising Message About the EconomyĬhina’s Country Garden Makes Overdue Dollar-Bond Payments, Narrowly Avoiding DefaultĬhina’s Country Garden Buys Time to Repay Debt-but Not Longīond Yield Hits Highest Since 2008, Adding Pressure to Borrowing Costs ![]() The longer the 30-year TIPS yield stays above 1.86%, where investors were expected to support it, “the more likely a renewed bearish push towards fresh cycle highs, with a medium-term target of the 2010 yield highs coming into view at 2.28%,” Edward Acton, a strategist at Citigroup Inc., wrote in a note Friday.News From WSJ U.S. Meanwhile, sentiment is taking a beating. ![]() Read More: Bond Market Inflation Gauge Shows Doubts About Swift Fed Victory But there is a chance we see more inflation premium in curves that we have not seen for a long time.” “Our base case is a meaningful slowdown, that leads to a recession and eventually brings rates down. “There is a possibility we need a higher real and nominal yields,” said Michael Cudzil, portfolio manager at Pacific Investment Management Co. Measured inflation and survey-based inflation expectations declined this week, but crude oil rose to its highest level of the year, and health insurance is poised to start adding to price growth. Some of the upward pressure on TIPS yields - as well as long-term nominal Treasury yields - reflects elevated uncertainty about the path of inflation. 24 “will be a litmus test of that.” The last auction of Treasury inflation-protected securities - a new 10-year maturity - on July 20 drew extremely strong demand at a yield of 1.495%, the highest for the product since 2010. An auction of 30-year inflation-protected Treasuries on Aug. They’ve had limited interest during the past decade, said Michael Pond, head of global inflation-linked research at Barclays.Īt 2%, “that investor base may come back,” Pond said. There is a risk that the Fed is making a mistake as policy is tightening quickly now.”Ī 30-year inflation-protected yield near 2% may prove irresistible to investors with long-dated liabilities such as pension funds and insurance companies. “Nominal growth is slowing and falling below nominal rates. “Our message is get into bonds, both nominal and real,” said Rob Waldner, chief strategist fixed income at Invesco. A push to higher real yields looms as a test of investor sentiment. In the interim, it collapsed to levels around -0.50% in 20 after the Fed slashed rates and demand for inflation protection skyrocketed. The 30-year real yield last exceeded 2% in 2011. Insulated from the effects Fed policy rates may have on future inflation, they’re also a barometer for the economy’s prospects. ![]() Inflation-protected Treasuries pay interest on base amount that’s adjusted for inflation, so their yields represent a risk-free rate of return. For others, uncertainty about whether inflation has peaked - combined with the US government’s growing borrowing need - means that all types of long-term yields may need to be higher still. Whether it gets there and where it will stop if it does has bond investors on edge.įor some, a 2% “real yield” is a screaming buy following Federal Reserve interest-rate hikes totaling more than 5 percentage points over the past 18 months. The yield on 30-year inflation-protected Treasuries is on the cusp of exceeding 2% for the first time in more than a decade. (Bloomberg) - Short-term Treasury yields once again advancing toward 5% hog the spotlight, but there’s another drama unfolding in a lesser-known corner of the US government bond market. ![]()
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