‘Strange’ bond reaction to US inflation data puzzles investors

Financial Times/Tommy Stubbington and Colby Smith

Repost from 7-20-2021

“US government debt has broken with tradition and pushed higher despite inflation surge.”

USAGOLD note: This article explores the reasons for that historical anomaly. On Monday, the yield on the 10-year Treasury dropped to 1.198. On July 1st, it was 1.52% – a dizzying descent. One cannot rule out the presence of the Fed as the bond buyer of last resort and, thereby, aggressively encouraging the trend.

10-Year Treasury Yield
(30 days)

line chart showing Treasury yields over the past 20 days a swift decline

Chart courtesy of TradingEconomics.com • • • Click to enlarge

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