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Bond investors unfazed as Trump ‘under-delivers’ in his first 100 days

Trump was supposed to spell the end of the bond rally.

Since 2008, unprecedented monetary policy has buoyed bond prices as the U.S. central bank accumulated government paper, its balance sheet ballooning to $4.5 trillion. But Trump’s pro-growth agenda threatened to stoke inflation expectations, possibly eroding the value of bond interest payments and principal.

Yet the reflation trade has petered out towards the end of President Donald Trump’s first 100 days, as he and his team find it harder to translate rhetoric into policy. As a result, Treasurys have rallied, returning close to their pre-election lows. Yields for the 10-year note TMUBMUSD10Y, +0.00% stood at 2.288%, the lowest levels since November.

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