Wary global bond markets brace for the supply floodgates to open

Yahoo!Finance-Bloomberg/Garfield Reynolds/Liz Capo McCormick/James Harai, Masaki Kondo/1-10-2022

“While governments are set to pare borrowings as fiscal outlays ease, the $2 trillion drop in central banks’ net demand will provide a risky real-world test of how much private demand exists.”

USAGOLD note: It’s not just the United States that is pumping new-issue bonds into the marketplace. It’s happening globally. If the selling exceeds the buying, secondary market sell-offs are likely to force interest rates higher – just about everywhere at a time when inflation dampens demand. Those attempting to get ahead of the approaching whirlwind have already put yields on an accelerated trajectory.

line chart showing 10 year yeilds on accelerated trajectory 1 month
Chart courtesy of TradingEconomics.com

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