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Hold On To 30-Year Treasuries Or Even Add Some More, Portfolio Manager Says
The search for yield and credit quality (flight to safety) by world markets put downward pressure on the interest rate of US high quality bonds.
This realty has to be weighed against the upward pressure the Fed will eventually put on interest rates. The Fed's mandate is not a global mandate, but markets are global.
It makes it difficult for the Fed to raise rates while the world is still de-leveraging because if the Fed raises rates, the world markets will pile in on these high quality bonds that pay a relatively higher rate than other high quality global bonds.
"Well boys just stick with me, we're in a tight spot" (Oh Brother Where Art Thou)
Comments
This realty has to be weighed against the upward pressure the Fed will eventually put on interest rates. The Fed's mandate is not a global mandate, but markets are global.
It makes it difficult for the Fed to raise rates while the world is still de-leveraging because if the Fed raises rates, the world markets will pile in on these high quality bonds that pay a relatively higher rate than other high quality global bonds.
"Well boys just stick with me, we're in a tight spot" (Oh Brother Where Art Thou)