It can be difficult to understand why the long-term yields on US Treasuries are so low. But in retrospect, it’s understandable why investors hesitate to bet on the rise after many years when yields are too high.
Theoretically, the 10-year Treasury yield is a “term premium” (investor-built fudge factor) of a return on investment continuously invested at a risk-free overnight rate set by the Federal Reserve. ) Should reflect what investors think will be adjusted. Yields as insurance against the risk that their interest rate forecasts are wrong. Recently, yields reflect the investor’s view that the main risk to their forecasts is that they turn out to be too high.
US Treasury yields look like a one-way bet otherwise
Source link US Treasury yields look like a one-way bet otherwise