"rates pushing prices down..."

[longandshort]

I don’t think they are commenting on causality.

 

[SunTrader]

And tomorrow night CME begins trading micro-size Treasury Yield Futures, what then?

LOL Dog chasing the Tail chasing the Dog.

https://www.cmegroup.com/trading/interest-rates/micro-treasury-yield-futures.html

 

[murray t turtle]

I've always wanted to ask about this, but it comes down to quibbling over language so it never seemed thread-worthy. Still, I can't resist.... CNBC Rick Santelli, saying something to that effect. "Yields are rising, sending the prices lower."
It's the same with stock dividends. No one would ever say "the dividend yield of Walmart went up, causing the price of Walmart stock to go down."

I'm just trying to figure out why there is such a pervasive, ubiquitous emphasis on yield as being causally linked to the price of bonds. Yields never cause prices to fluctuate. Price fluctuations stemming from normal trading activity--and that alone--causes yields to fluctuate.

%%
Good points, for sure, words do have meaning.
AND really, since when\ IS THE NEWS KNOWN FOR ACCURACY?? MR. Santelli, most likely knows better , so it maybe a bit of his way to shorten it for TV.
LOOK how often so many of those clowns use, wrongly, ''overbought, oversold'' NOT calling Mr Santelli a clown.

 

[xandman]

You failed to see the context. What he meant was yield demanded by investors is going higher (due to rising inflation expectations) thus making the present value of bonds worth less.


Bond investors/traders don't primarily watch the price series. They think about basis points over benchmark for a given duration and credit risk. That's also how they quote each other.

 

[Bastion_01]

I've always wanted to ask about this, but it comes down to quibbling over language so it never seemed thread-worthy. Still, I can't resist.

Everyday I hear journalists and pundits talking about yields, making statements like "yields are rallying today, causing prices to drop." Just now, I heard that reporter on CNBC Rick Santelli, saying something to that effect. "Yields are rising, sending the prices lower."

Am I right in thinking this perception is exactly backwards? The ONLY way yields can ever rise is if bond traders sell all the bonds at a certain price point, thus opening the market to the next bid lower. When that happens, the yield is effectively higher because the price went down but the income from the bond is fixed. The bond now yields more than it did before because this fixed income-bearing instrument was cheaper to buy, so it's relative rate of return is now higher.

Therefore, rates don't affects prices. It's always the other way around: Buying and selling of bonds affects the price of bonds, which in turn changes the relative yield of the bond. It's the same with stock dividends. No one would ever say "the dividend yield of Walmart went up, causing the price of Walmart stock to go down."

I'm just trying to figure out why there is such a pervasive, ubiquitous emphasis on yield as begin causally linked to the price of bonds. Yields never cause prices to fluctuate. Price fluctuations stemming from normal trading activity--and that alone--causes yields to fluctuate.

they're talking about fair values of non-bond assets, where present values are lowered when rates are higher since it needs to be discounted assuming continuous compounding.

 

[murray t turtle]

A bond's yield is its only salient attribute - the only reason one would ever buy it, with a few special-case exceptions. People buy equities.... for a whole universe of reasons beyond the dividend yield (if any).

%%
Good thing about stocks/ETFs another S&P , another Moodys US debt downgrade may help them; but bond sellers would not look so kindly on that, most likely + i would not blame them......................................................................................IF i kept on borrowing 137%, 157%+/. of what i made \LOL i could get a loan but not cheaply, even if the collateral was good.,