Quote:
Originally Posted by kishac
Generally speaking, inflation influences bond yields. The higher the inflation rate the higher the bond yields investors demand.
One metric to look at is commodity prices, since those indirectly affect the prices you pay at the register.
Just my two cents, but I expect more jolts in bond yields within the next year or so. Oil prices have been rising steadily after its low point last year, but once travel reopens and air travel picks up, it'll likely cause surges in oil prices as well as surges in bond yields. Federal stimulus packages were welcomed by the stock market in the recent past but lately it appears to spook the bond markets. We will see how the bond market reacts to the next stimulus plan when approved.
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If you view today stock market reaction to last week selloff as DEAD CAT BOUNCE,then more sell off will follow if the bon yield keeps moving up,even gradually ,will spook the markets.
Who is to say what will happen in the next treasury auctions?
If I am a bond investor and sitting at my desk listening to Biden urging everyone to join the union and Elizabeth Warren crying how to tax the ultra rich and all the industrial companies gearing up for a piece of that trillion stimulus pie,I would be a fool to eat bon yield of 1.2%
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