Treasury Bond Yields

It means that they are not being bought. Normally, if the stock goes down, treasury yields go down because investors use them as safe havens for their money, so there's higher demand for them and hence the yield goes down.So why isn't this happening now? There's probably a bunch of reasons. It seems there's a liquidity problem in the markets, which is also weird because stocks are being sold, so there should be enough liquidity, but it seems people are rather holding on to

Central banks have been buying up treasury bonds, thereby lowering the yield. They are basically saying"Hey rich people with cash, if you want to get a return on your money, you have to stop investing in risk-free government bonds, and start investing in businesses in the real economy"The Fed has basically 'pushed' investors out of bonds, and into equities and real estate. This partly explains the absurdly higgh gains we saw recently in those asset classes. But now that

Say you bought a $100 5 Year US treasury bond paying 1% a year interest ($1) from the Government for $100 a year ago. Now interest rates have risen to 4-5% and any buyer could buy something else that would give them more interest so they will pay less than $100 for your bond.If you hold that bond to maturity in 5 years the US government will give you your $100 in full though.The Fed has now started a program that lets banks use their treasury bonds as collateral against cash loans - if th

The market doesn't believe this. If it did, the 10 year Treasury bond rate would be a lot higher, instead the yield curve is negative.https://ycharts.com/indicators/10_year_3_month_treasury_spre...

Noob question: does this have something to do with inverted yield curve? Isn't it simply more useful/profitable for banks to finance their operations with short term debt right now?

Jesus Christ. The fed aren't offloading anything, they just won't be reinvesting when existing bonds mature (roll off the balance sheet). And inverse correlation between stocks and bonds isn't some law of nature.

This podcast is very informative on this topic:https://www.bloomberg.com/news/articles/2019-11-11/this-is-w...

Reading my answer after posting, I think your confusion is really coming from the way bond pricing works, not anything to do with central banking. The price of a bond is determined by a pretty simple formula, P = M / (1 + i)^n, where P is the market price, M is the redemption value at maturity, i is the interest rate per period, and n is the number of periods at which interest is paid. Since interest rate is in the denominator, this means a higher interest rate bond has a lower market value

The reason why their safe investments were losing value is that the Fed had raised rates. Their assets weren't bad, they had lost value because the Fed has raised rates. The market is expecting rates to drop hence the inverted yield curve.

The bonds in question are Treasuries, so when the money is repaid it is repaid by the Treasury.Every one of these bonds represents future borrowing (if rolling over the debt) or future tax revenue.It's the secondary effects of buying these bonds that is stimulative. Lower treasury yields means investors seek higher yields elsewhere (e.g. in stocks, corporate bonds etc etc.). They buy those, driving up prices, which in turn drives down yields there too.In any case, bond yields have