As a result of the sharp rise in the rate of return on United States debt, the demand for debt from Wall Street is increasing. However, the macro-research and institutional broker Strategas poured cold water and believed that this could be a mistake.
Since the US Federal Reserve began a radical hike last year, long-term US debt yields have risen, although there has been some slowdown and a marked fall in long-term debt returns in the half-year period between last October and April. Last week, the 10-year United States debt-return rate briefly passed the critical 5 per cent mark, reaching its highest level since 2007. However, as Bill Ackman, who had previously made a fine long-term United States debt in August, flattened the warehouse, the return on the United States debt fell somewhat. Currently, the 10-year United States debt return is at a line of 4.9 per cent.
At present, the return on investment-grade bonds is higher. The ICE United States Bank's United States Enterprise Index had an effective rate of return of 6.3 per cent.
Strategas predicts that the rate of return on United States debt is still on the rise and that bond prices cannot be expected to bottom. Similarly, in the past 40 years of declining bond yields, few investors have actually earned money through counter-trading. So, even if the return on the United States debt were close to the cyclical top, if the trend in the rate of return on long-term bonds was still high, would the drop in the bet interest rate generate real money and silver?
Strategas believes that US debt yields will come to the top in the future, sooner rather than later, but it is alarming that many people are so eagerly predicting that they will peak, which is not what US Treasury debt should have done after more than 40 years of worst bear-marketing. Bear City ended with indifference and neglect.
Strategas has a different view from the mainstream view of Wall Street today. Wall Street analysts say that it is now a good time to put cash into US debt, which has become more attractive for the first time in many years in relation to US equity, as the return on US debt, which is extremely low-risk, has soared. Large institutions, such as Belet, Pimco and others, are copying the United States debt.
According to United States and silver statistics, last week there was the largest weekly net inflow of dollar-debt funds since the collapse of Silicon Valley on 23 March, reaching $9.2 billion, of which the largest inflow of long-term United States-debt funds reached $5.6 billion.
On Monday, the United States Treasury Department's renewed four-quarterly projected borrowing volume fell to $77.6 billion, below the analyst's expectations, but still reached a new high during the same period of the calendar year, with a combined borrowing of approximately $1.5 trillion in the fourth quarter and the first quarter of next year after borrowing $1 trillion in the third quarter. After the data were released, the United States debt return fell short.
Current investors are closely following the Fed ' s actions, and the Fed ' s meeting this Wednesday is expected to remain on hold. As indicated at the previous FOMC meeting in September, officials expect a further increase this year, followed by two reductions next year.