Reuters: U.S. Treasuries are shunned, but market operations remain normal; the 10-year bond return hits a century-low
On September 9, according to a Reuters column published on Tuesday, the size of U.S. federal government debt has surpassed $40 trillion, the fiscal deficit as a share of GDP has reached 6%, the yield on the 10-year U.S. Treasury is approaching 5%, and market sentiment toward the outlook for U.S. Treasuries is generally pessimistic. However, based on various indicators, the bond market overall is still functioning normally in line with fundamentals.
The article analyzes that the United States’ nominal economic growth is about 6%, unemployment remains at 4.1%, employment is close to full capacity, and inflation has been above the Federal Reserve’s 2% policy target for nearly six consecutive years.
Meanwhile, combined with the investment boom in the AI industry and the continued expansion of the fiscal deficit, investors demand higher risk compensation, making this growth rate realistically reasonable.
Data also show that over the past decade, the rolling return on long-term U.S. Treasuries with maturities of more than 15 years was -2%, the worst performance in more than 100 years, standing in sharp contrast with the S&P 15% and 11% annualized returns for commodities over the same period.
However, the MOVE index, which represents bond-market volatility, is below the average level in recent years. Overseas central banks also appear to be reducing holdings of U.S. Treasuries in a gradual pace, suggesting the market has not seen any clear panic-driven selling.
In addition, some institutions’ valuation models even suggest that the current yield on the 10-year U.S. Treasury remains in a relatively low range, and that the bond market is adapting to a brand-new environment of higher interest rates.
In summary, Reuters’ analysis indicates that although the U.S. Treasury market faces pressure, its operating mechanism remains intact and the market continues to perform normal adjustment functions.
This view provides an important reference point for understanding the current bond-market environment, helping investors make more rational investment decisions amid complex conditions.
#美债长债十年回报创百年低位
On September 9, according to a Reuters column published on Tuesday, the size of U.S. federal government debt has surpassed $40 trillion, the fiscal deficit as a share of GDP has reached 6%, the yield on the 10-year U.S. Treasury is approaching 5%, and market sentiment toward the outlook for U.S. Treasuries is generally pessimistic. However, based on various indicators, the bond market overall is still functioning normally in line with fundamentals.
The article analyzes that the United States’ nominal economic growth is about 6%, unemployment remains at 4.1%, employment is close to full capacity, and inflation has been above the Federal Reserve’s 2% policy target for nearly six consecutive years.
Meanwhile, combined with the investment boom in the AI industry and the continued expansion of the fiscal deficit, investors demand higher risk compensation, making this growth rate realistically reasonable.
Data also show that over the past decade, the rolling return on long-term U.S. Treasuries with maturities of more than 15 years was -2%, the worst performance in more than 100 years, standing in sharp contrast with the S&P 15% and 11% annualized returns for commodities over the same period.
However, the MOVE index, which represents bond-market volatility, is below the average level in recent years. Overseas central banks also appear to be reducing holdings of U.S. Treasuries in a gradual pace, suggesting the market has not seen any clear panic-driven selling.
In addition, some institutions’ valuation models even suggest that the current yield on the 10-year U.S. Treasury remains in a relatively low range, and that the bond market is adapting to a brand-new environment of higher interest rates.
In summary, Reuters’ analysis indicates that although the U.S. Treasury market faces pressure, its operating mechanism remains intact and the market continues to perform normal adjustment functions.
This view provides an important reference point for understanding the current bond-market environment, helping investors make more rational investment decisions amid complex conditions.
#美债长债十年回报创百年低位
