💵 The U.S. Treasury keeps flooding the market with money
On October 1, the U.S. Treasury will buy back Treasuries (U.S. government bonds) with a maturity of 10–20 years in an amount of up to $6 billion. The limit for one such purchase was recently increased.
Yesterday the yield on 30-year bonds reached 5.62%: the highest level since 2002.
What does this mean in simple terms:
• The Ministry of Finance buys bonds itself, so demand for them increases. Bond prices rise, and yields may fall
• When bond yields fall, money becomes cheaper. Investors find it more profitable to invest in stocks, Bitcoin, and other risky assets than to hold safe bonds
• The Ministry of Finance takes from banks and funds the bonds that are hard to sell quickly, and in return they receive cash. There is more money in the market
#doge