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What is interesting is how the dollar is strengthening while the US debt to GDP ratioDollar is strengthening as demand for dollars increases as return on UST's increases.HEYYOU says
How does a constantly changing fiat currency have any value?If you feel that way, please throw all of your flat into the fireplace and light it up.
How does a constantly changing fiat currency have any value?
'A sucker is born every minute.'
Hey you, "HEY YOU", then what is the reasonable alternative ?
Put your millions in 10 year UST's and fire up the bong.
angerous advise when even the Great and Powerful Bubble-Blower himself is saying bonds are due to bust.Nay, nay. If you hold to maturity, you get back the amount you originally plunked down, plus you get paid 3%, maybe to be 4% soon, per year, for lending your moolah to Uncle Sam. It's only if you sell before maturity in a rising interest rate environment that you lose money. And if you sell in a falling interest rate environment (i.e., recession) you make money.
Nay, nay. If you hold to maturity, you get back the amount you originally plunked down, plus you get paid 3%, maybe to be 4% soon, per year, for lending your moolah to Uncle Sam.
I assume you are calculating for inflation, and the possibility of hyperinflation?Not me, Mr. Market has inputed that in the rate. It's the risk-free rate, by gum.
Summary
The yield on the 10-year U.S. Treasury note has been teasing the 3.00 rate for some time now, and finally on Tuesday seemed to cross over to a higher level.
Having this yield above 3.00 percent only seems right as the Federal Reserve attempts to raise short-term rates to "more normal" levels, while it continues to reduce its securities portfolio.
But higher rates will result in a stronger U.S. dollar, and this is exactly what was seen on Tuesday as Treasury yields moved upwards.
Well, the yield on the 10-year U.S. Treasury note finally broke through the 3.00 percent barrier and looks like it could stay there. The note closed on Tuesday to yield 3.07 percent. Now we will have to see whether or not the yield remains above the 3.00 percent level.
Breaking down the yield into a real yield and expected inflation, we find that the yield on the 10-year Treasury Inflation Protected securities closed at 0.89 percent. The 10-year not had not closed to yield this much since September 6, 2013, and then one has to go way back to April 14, 2011, to get this high a yield for the 10-year TIPs.
In terms of inflationary expectations, the breakeven yield came in at 2.18 percent on Tuesday. In the first half of May, inflationary expectations averaged 2.17 percent, so there one could argue that there has been no shift in expected inflation to get the higher nominal yield.
In fact, there has been little shift in 10-year inflationary expectations over the past four to six weeks. At the current time, I don’t expect any new information coming to the market that would change expectations from current levels.
Thus, for the nominal yield on 10-year Treasury notes to remain at 3.00 percent or above, the yield on the 10-year TIPs will have to move up. What is possibly in store here?
Well, officials in the Federal Reserve system have stated that they would like to return short-term interest rates and the Fed’s balance sheet back to “more normal” levels. In order to do this, Fed officials have signaled that they would like to raise their policy rate of interest at least two more times this year, but might also consider one more increase before the end of the year. This would make the target range for the Federal Funds rate 2.25-2.50 percent.
https://seekingalpha.com/article/4174557-10-year-treasury-note-closes-3-percent-u-s-dollar-gets-stronger