doodle wrote: ↑Tue Oct 13, 2020 10:00 amIs it? Or does the Fed control rates? There is some debate to how much influence they can exert on long end of curve but the do have the ability theoretically to ensure auctions never fail.mathjak107 wrote: ↑Tue Oct 13, 2020 9:44 ambond investors will want more yield to take the risk with bonds ..at the end of the day it is the worlds bond investors that decide what is proper compensation.doodle wrote: ↑Tue Oct 13, 2020 9:41 amI don't see how we get back to higher rates at all considering the amount of debt in system and the way asset prices are tied to low rates. A reversal especially a quick one would be brutal and politically unconscionable. After all, everything is on government life support these days. There is no free market.mathjak107 wrote: ↑Thu Sep 17, 2020 5:14 pm at least 2 to 2-1/2% in rates and even then I need to evaluate..it was a 40 year drop to get here ....the return trip back up may not stop for quite a long time .
there is little compelling argument when yields are 1.50% going out 30 years and the fed says their target is 2-3% inflation .
Europe and Japan are negative now. Why not us next?
the inverted yield curves happen when the bond investors disagree with what the fed is doing . so it is the bond investors in the drivers seat ..the fed may do a bit of influencing if it can but if bond investors want more they will get more.
if the world bond investors drive up rates the fed could have a very hard time stopping that .
we are very different then japan or europe . they use negative rates to force banks to make loans . babnks in europe and japan do not do what banks here do ...... they shy away from lots of deals unlike our banks .
our banks have no problems when it comes to making loans ...the negative rates act as a tax on money not loaned out by banks in europe and japan ....