CCTV News:The yield of us treasury bonds has hit new highs for many years. Experts said that the bond yield is inversely proportional to the bond price. Recently, the medium and long-term US bond yield has risen sharply, which has also led to a significant decline in the price of US Treasury bonds in the corresponding period. This reflects that the market believes that the high inflation situation in the United States may last longer.
The data shows that as of October 6, local time in the United States, the yields of 3-month, 2-year, 5-year, 10-year and 30-year US Treasury bonds increased by 7 basis points, 23 basis points, 52 basis points, 69 basis points and 75 basis points respectively compared with the end of August. Among them, the yield of 5-,10-and 30-year US Treasury bonds has risen to a new high in the past 16 years, and the yield of 2-and 3-month US Treasury bonds has reached the highest level in the past 17 years and 22 years.
Wen Bin, Chief Economist of China Minsheng Bank:Influenced by inflation expectations and other factors, since mid-May this year, the yield of U.S. government bonds with various maturities has generally increased. With the recent imbalance between supply and demand in the U.S. government bond market, the price of government bonds with various maturities has declined to varying degrees, and the yield of U.S. government bonds with various maturities has hit new highs for many years.
Reflecting the financial market’s concern about the Fed’s continued high interest rates.
At the same time, the long-term and short-term yields of US Treasury bonds are upside down. The yield of 2-year and 10-year US Treasury bonds has been upside down for 15 months, and the maximum upside down rate was as high as 108 basis points. The yield of 3-month and 10-year US Treasury bonds has been upside down for 11 months, and the maximum upside down rate was as high as 189 basis points.
Wang Qing, Chief Macro Analyst of Oriental Jincheng:The core factor affecting the interest rate trend of short-term treasury bonds is monetary policy and expectation, which means that the market judges that it is unlikely that the Fed will continue to raise interest rates in the short term. The yield of medium and long-term treasury bonds is mainly linked to fundamental factors such as inflation level and economic growth. The current situation shows that the market believes that the high inflation situation in the United States will last longer, and it is expected that the Fed will postpone the interest rate cut next year.
At present, there is an imbalance between supply and demand in US Treasury bonds.
In the third quarter of this year, the net issuance of US Treasury bonds exceeded US$ 1 trillion, a record high in the same period. It is estimated that the net issuance of US Treasury bonds will reach US$ 850 billion in the fourth quarter. However, on the demand side of US Treasury bonds, as the Federal Reserve keeps high interest rates and reduces the purchase scale of US Treasury bonds, the number of buyers of US Treasury bonds decreases. The imbalance between supply and demand is constantly pushing up the yield of US Treasury bonds, bringing down the bond price.
Lu Zhe, Chief Economist of Debon Securities:Since the second half of this year, the issuance of U.S. Treasury bonds has increased significantly, and the Fed has continued to shrink its balance sheet, that is, the Fed sells U.S. Treasury bonds in the market, especially medium-and long-term varieties of Treasury bonds, which has brought about an obvious imbalance between supply and demand in the U.S. Treasury bond market, which has also aggravated the rise in the yield of U.S. Treasury bonds and the decline in prices.
It will continue to have an impact on global financial and trade stability.
With the recent rise in the yield of US bonds, the financial market has fluctuated greatly. Experts said that in the long run, this situation will adversely affect global financial and trade stability in the future.
The yield level of national debt plays an important role in the asset pricing of financial markets. Recently, there have been obvious fluctuations in financial markets from the United States to the world. The US dollar index remained at a high level, and non-US currencies were generally under pressure.
Concerns that the Fed will "keep higher interest rates for a longer period of time" are spreading to the global financial markets, and the yields of European government bonds, including Britain, France and Germany, have generally increased. Experts said that the return of global capital to the US and European markets has also brought external pressure to emerging economies, especially countries with heavy debt burdens.
Wen Bin, Chief Economist of Minsheng Bank:Recently, the yields of government bonds in many developed economies have risen to varying degrees. In addition to the common fundamental factor of high inflation, the spillover effect of rising US Treasury yields is also an important reason. The longer the yield of US Treasury bonds stays at a high level, the more likely it will have a greater impact on global financial stability.
In addition, according to the latest forecast of the World Trade Organization, in 2023, the global merchandise trade volume will only increase by 0.8% year-on-year, which is lower than the 1.7% forecast in April and far lower than the average annual growth rate of 2.6% since the financial crisis.
Wang Qing, Chief Macro Analyst of Oriental Jincheng:High interest rates will aggravate the economic slowdown in developed economies, leading to a decline in the import demand for goods and services in developed economies, and thus global trade will continue to be dragged down, which will slow down the pace of global economic recovery.
Since last year, the enthusiasm of global central banks to buy gold has continued to rise. According to the data of the World Gold Council, central banks bought 77 tons of gold in August and 219 tons in the past three months. Due to the sharp rise in the yield of US Treasury bonds, the performance of the US dollar index is relatively strong. Since late September, the international gold price has declined to some extent.
Lu Zhe, Chief Economist of Debon Securities:Since last year, concerns about geopolitical conflicts, inflation hedging and long-term value preservation have prompted global central banks to increase their gold purchases and reserves. The international gold price is denominated in US dollars, and the yield of US Treasury bonds has risen sharply, pushing up the US dollar, which will inevitably bring downward pressure on the international gold price. However, when the yield of US Treasury bonds continues to rise and the price drops sharply, many countries are increasing their purchases of gold for the sake of asset preservation.