Lessons of the bond yield curve
Article Abstract:
US bond prices have risen in 1995, and yields of three-month treasury bills are higher than five-year bonds. Normally longer-term bonds offer higher yields since they have to be held for a long period for a return to be guaranteed. Expectation of interest rate falls has meant that long bonds appear more attractive in terms of returns than bonds bought from funds reinvested after three-month bonds have been sold. Inverted yield curves indicate slow economic growth and a likely drop in rates, as well as a rise in the US dollar.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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US bonds: bond blues
Article Abstract:
The US market for government securities performed well in 1995, but there are some risks in 1996. The key issue is the extent to which US interest rates are reduced by the Federal Reserve. Wage inflation has not been a problem, but this could change, and if it does, interest rates are not likely to fall. There is also concern over the need for an agreement on the budget, and the impact of rising prices for commodities, especially if world economic growth revives.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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Unsustainable?
Article Abstract:
United States bond yields have dropped in 1997 and have reached a level previously seen in early 1996. Stephen Roach from Morgan Stanley is concerned that price and wage inflation will result from skill shortages and he argues that bond yields are likely to rise again. Paribas' Eric Green also sees bond yields as likely to rise, though Kit Juckes from NatWest Markets sees deflationary effects from Asian markets as likely to prove deflationary for bonds.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1997
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