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#Treasuries

0 posts0 participants0 posts today
Spin D'Accord

The Federal Reserve had been gradually unloading Treasuries since mid-2022. Since Trump's foray into market chaos/universal tariffs, they've substantially slowed the unloading of Treasuries.

2 points:

1) Had they continued pace with dumping Treasuries, they would have contributed to the concern that US bonds were no longer safe.
2) Had they re-started purchases of US bonds, no one would have noticed the selloff. This sure looks like evidence in support of MMT.
#Economics #Treasuries

Jason D. Moss 🇨🇦

The combination of interest rates soaring amid a slump and the currency plunging despite rising interest rates isn’t what we normally expect for advanced countries, let alone the owner of the world’s leading reserve currency. It is, however, what we often see in emerging-market economies. That is, investors have started treating the United States like a third-world economy.

@pkrugman #Tariffs #Economy #Bonds #Treasuries
paulkrugman.substack.com/p/the

Paul Krugman · The Third-Worlding of AmericaBy Paul Krugman
Continued thread
Nonilex

The premium investors demand to hold #US Treasuries rather than #German #Bunds - now apparently one of the safe havens of choice - has exploded.

It's heading for its biggest weekly increase since the 1990s, which reflects the extent to which investors are dumping #Treasuries.

The dollar is at the heart of it &, with #markets, it's always what's beneath the surface that can cause the most damage.

#Trump#tariffs#economy
Continued thread
Nonilex

The main casualty in all this is the #US #dollar.

For 80 years, it's been the mainstay of the #financial system & the ultimate of safe havens, along w/ #Treasuries.

But w/investors now doubting the reliability of the #UnitedStates as a #trading partner & fears creeping in about the stability of the #bond market, the dollar is bearing the brunt.

#Trump #economy #inflation #recession #geopolitics #RevengePolitics
reuters.com/world/trump-tariff

Continued thread
Nonilex

Global #stocks fell & the #dollar sank further on Friday, while a manic #bonds selloff took hold in a brutal end to the week of tit-for-tat worldwide #tariffs that have fed fears of a deep #recession & shaken investor confidence in #US assets.

The selloff in US #Treasuries picked up pace during Asian hours, with the 10-year note yield rising to 4.45%, gaining about 45 basis points in the week, the biggest increase since 2001, LSEG data showed.

#ETTTTS #trump #economy
reuters.com/markets/global-mar

Continued thread
Nonilex

US #Treasuries [bills, notes, #bonds & TIPS] are starting to sell off again too. The yield on 10-year Treasuries just climbed to 4.37%, the highest since February. Concerns about a rout in #US assets, including Treasuries, have gripped #markets these past few days. These assets are normally considered safe havens that investors turn to in times of turmoil.

#Trump#economy#inflation
Replied in thread
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⚯ Michel de Cryptadamus ⚯

@GhostOnTheHalfShell the explanation i've settled on for myself about the various japanese carry trades is pretty simple:

1. ever since the 1989 crash Bank of Japan has loaned out money at insanely low rates (0% or even negative sometimes IIRC)

2. people like to borrow money from bank of japan and invest it in other stuff (like US treasuries) and pick up a small rate of return (e.g. if a japanese bank is charging 0.5% and treasuries pay 2% you can make 1.5% "for free")

3. because the rate of return is low people juice their returns by levering the fuck up and borrowing $50 for every $1 they're actually putting in

4. this amount of leverage means that even small movements in the value of the asset (e.g. US treasuries) blows people up (e.g. at 50x leverage a 2% move is death)

the specifics of each carry trade are hard to follow but BOJ has been regarded as a ticking time bomb for a long time now

#BondMarket#economics#economy
Ivan E. Gubkin

#Stocks and #bonds are often seen to move inversely, but futures indicate US equity markets are poised to sell off on Wednesday alongside US #treasuries Hedge funds, which are big holders of Treasuries, are also believed to be selling.

Former US Treasury secretary Larry Summers wrote in a post on X that “this highly unusual pattern suggests a generalized aversion to US assets in global financial markets. We are being treated by global financial markets like a problematic emerging market.”

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