首页
登录
职称英语
Government bond markets are supposed to be the accountants of the financial
Government bond markets are supposed to be the accountants of the financial
游客
2023-12-22
6
管理
问题
Government bond markets are supposed to be the accountants of the financial world: calm, steady and rational. They are not supposed to frighten the horses. But in the days following June 7th, bond investors had a traumatic experience. The yield on the ten-year Treasury bond rose from 4.96% that day to reach 5.33% during trading on June 13th before closing just below 5.2%. What makes the slump in bond prices all the odder is that Treasury bonds are normally regarded as the risk-free asset, the one that investors buy when they are really worried. What could have prompted the sell-off?
Inflation
One thing that could cause investors to flee government bonds would be an unexpected rise in inflation. Higher inflation devastates the value of fixed-income assets, as investors found to their cost in the 1970s. But this does not look like an inflation scare. Real yields have caused the vast bulk of the move: inflation expectations have moved up by only around a tenth of a percentage point.
Strong Growth
Investors may well have decided that American growth will be stronger than they had previously expected. But, in the absence of inflation, faster growth need not be bad for government bonds: higher tax revenues will make it easier for the government to service the debt. Alternatively, unexpectedly strong growth ought to be good news for equities, yet the stock market has also fluctuated wildly.
Rate Cuts
Another potential explanation is that the markets have given up on rate cuts from the Federal Reserve this year. But the futures market suggests this hope has been dwindling for some time. Global monetary policy is generally being tightened. However, this should not necessarily be bad news for long-dated bonds, if investors believe(as they seem to)that central banks will be successful in containing inflation.
This suggests that economic fundamentals may not be the primary cause for the sell-off. Big market moves like this tend to occur when investors shift their positions in a hurry. In this case, it looks as if some bond bulls decided to throw in the towel.
Hedging Behavior of the Mortgage Issuer
The hedging policies of mortgage issuers may also have played a part. Because most Americans have fixed-rate mortgages, issuers find they tend to get repaid early when bond yields fall: they hedge this risk by buying Treasury bonds. When rates rise, borrowers are far less likely to repay: that causes mortgage issuers to sell their bonds. The effect can be to exacerbate short-term moves in bond prices.
Asian Central Banks
The big question, however, is whether Asian central banks have lost their appetite for American Treasuries. Part of the reason for the rise in yields was a disappointing auction of ten-year bonds, with foreign investors buying just 11% of the issue. Asian central banks had been buying Treasury bonds with their foreign-exchange reserves in an attempt to prevent their currencies from appreciating too rapidly against the dollar. Some analysts have estimated that these purchases had pushed bond yields between a half and a full percentage point below the level they would otherwise have reached.
The result was that yield curves were "inverted"—long yields were below short-term rates. When he was Fed chairman, Alan Greenspan described this state of affairs as a "conundrum": such curves had traditionally been a harbinger of recession, but perhaps Asian central bank policies meant this signal was no longer valid.
Whoever has been selling Treasury bonds, the result is that the conundrum has disappeared: yield curves are now sloping upwards. [br] Bond investors had a traumatic experience for the following reasons EXCEPT that______.
选项
A、the government bond market should behave quietly, while it was not then
B、the yield on the ten-year Treasury bond rose dramatically
C、the government bond market experienced a great unexpected sell-off
D、the bond prices appreciated dramatically
答案
D
解析
转载请注明原文地址:https://www.tihaiku.com/zcyy/3296376.html
相关试题推荐
AstudycommissionedbytheAustraliangovernmentfoundthatwomenarepartially
Theminister’sunwisefinancialstrategy______ahighrateofinflationthatseve
Banksare______toprotecttheircustomers’financialprivacyandatthesametim
Theeraofdividedgovernmentbegins,inauspiciously.Willthepresidentbea
Theeraofdividedgovernmentbegins,inauspiciously.Willthepresidentbea
Theeraofdividedgovernmentbegins,inauspiciously.Willthepresidentbea
ThegovernmentisgettingnothingdonebecauseBrexitoccupiesmostoftheircon
Whenchangestakeplaceinthemarketstheyareinvolvedin,itcanencouragene
Asthefederalgovernmentshutdownapproachesthetwo-weekmark,it’sbecome
Asthefederalgovernmentshutdownapproachesthetwo-weekmark,it’sbecome
随机试题
Drunkendriving,sometimescalledAmerica’ssociallyacceptedformofmurder
某单位在系统试运行阶段,因相关政策变化造成软硬件配置发生变化,系统需要进行(
在股票市场上投资者往往对亏损股票存在较强的惜售心理,即继续持有亏损股票,不愿意实
对建设工程项目进度目标进行分析和论证,其目的是()。A、论证进度目标是否合理
银行A因急需1600万元资金头寸,将持有的部分利率债券质押给银行B,并与银行B签
招标人应根据招标文件中列出的内容和向总承包人提出的要求计算总承包费,其中,招标人
在一次对全市中学假期加课情况的检查后,甲、乙、丙三人有如下结论:甲:有学校存在加
下列关于饭店收入的说法中不正确的是( )。A.饭店收入是指饭店在销售商品、提供
下列关于对外交通规划的表述,不准确的是()。(2012年真题)A.城市对外
依据《中华人民共和国固体废物污染环境防治法》,对产生危险废物而不处置的单位,由所
最新回复
(
0
)