May 23, 2022

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US 5-30 year bonds fall into negative territory

US 5-30 year bonds fall into negative territory

This Monday 5-30 year US bond yield curve fell into it negative area For the first time since 2006 after a huge sale. Meanwhile, the short term bonds Jumping to its highest level since 2019 according to Dhara Ranasinghe on Yahoo Finance.

While parts of the yield curve, 5-10 years and 3-10 years, did inverted last week, the narrowing gap between the 5-year and 30-year maturities of the bond market is the world’s largest in negative territory raising concerns. The US central bank’s tough approach to curbing inflation could hurt growth.

“This is exactly what the bond market is pricing in: that the Fed’s policy response will sharply limit economic growth,” he said. Peter Chatwell, head of multi-asset strategy at Mizuho Bank.

The difference between 5-year and 30-year US Treasury yields dropped below 0 For the first time since at least February 2006 3.5 basis points. The difference has since collapsed 53.5 basis points positive advance this month.

Meanwhile, the 2-Year Treasury Bond Yield climb to 2.41%, Its highest level since the beginning of 2019 and rose by about 7 u In a day.

Ten-year yields rose decisively above the 2.5% mark, reaching their highest level since April 2019.

The gap between 5-year and 10-year returns narrowed to about minus 13 uand move to the inverted region.

Bank of America (BofA) and Citi Join a small but growing number of major investment banks on Friday who called More sharp increases in interest rates By the US Federal Reserve in the context of high inflation and aggressive statements from politicians.

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“There is a real concern that the monetary tightening needed to bring inflation back to target, particularly in the United States, could, at best, lead to an economic slowdown or, at worst, a general recession,” he said. Stuart Cole, chief macroeconomist at Equiti Capital.