As the Federal Reserve winds down its third round of unprecedented stimulus, one thing has become increasingly clear in the bond market: The U.S. economy just isn’t going to grow enough to upend demand for Treasuries.

While more than $3 trillion of debt purchases since 2008 have helped the U.S. recover from its worst recession in seven decades, bond-market indicators for long-term inflation, growth, and funding costs are all lower now than they were at the end of the central bank’s first two rounds of quantitative easing.

Investors’ diminished outlook for the economy could help prevent an exodus from the $12.2 trillion market for Treasuries and contain long-term borrowing costs for the government, companies, and consumers as the Fed moves toward raising interest rates. After demand for the benchmark 10-year note this year pushed down yields by almost half a percentage point, to 2.61 percent, implied yields now suggest investors don’t foresee them increasing to 3 percent for at least another year.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.