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Will we ever see Treasury yields above 8%?
- Thread starter jrcase
- Start date
Quote from jrcase:
I heard a speaker say that if the Treasury yields ever climb above 7-8% that the US would not be able to service it's debt in 5 years with projected deficits. I have also heard people say that with "rampant" inflation down the road that we could see double digit yields in 5 years.
Although, I would love 10 percent yields on a long bond, if the US could not service those interest payments.... we all lose. I am interested in the opinions of people here. What is your guess on the 30 year treasury bond in 1,3,5, and 10 years from now?
is there any hury?
Rosenberg had several articles on this. Babyboomers (disillusioned with speculative investments blowing up in their faces shift from a capital gains focus to an income focus) and US banks potentially stand ready to soak up US bonds. Private individuals used to own a much larger bond share in their private asset allocation. All this changed in the last three decades. According to Rosy we may see a reversion to the 50s/60s here.Quote from libertad:
What would happen if China nor Japan could no longer buy US debt ?
This is the question....
All this is not completely infeasible. Private investors and institutions in Japan are happily buying JGBs yielding 1-2% since a decade or two.
Quote from makloda:
Rosenberg had several articles on this. Babyboomers (disillusioned with speculative investments blowing up in their faces shift from a capital gains focus to an income focus) and US banks potentially stand ready to soak up US bonds. Private individuals used to own a much larger bond share in their private asset allocation. All this changed in the last three decades. According to Rosy we may see a reversion to the 50s/60s here.
All this is not completely infeasible. Private investors and institutions in Japan are happily buying JGBs yielding 1-2% since a decade or two.
....................................................
Lack of options ....is a reason....
Prices horizontal ? The question being "how long "....
And actually the low interest rate trap....is key in valuations....and thus banks' books....
ie the norm for LT debt 2% for 10 years....
What happens to the value of a LT bond with a 3% coupon....when rates move to 6%....10%....
What happens to valuations in general across the board ?
This is the interest rate trap.....