government bonds

Banks hold lots of government bonds, and when their value goes down, it can make lending out money less attractive.

The extra premium that investors require to hold Treasurys over the long-term, known as a “term premium,” has been rising.

The war in the Middle East is pushing up inflation in the short term, but longer-term expectations are tamer. That’s relieved pressure on long-term bonds, though that could change if the war escalates.

Corporate bond spreads have been relatively tight this year, implying that investors aren’t demanding much extra compensation to account for credit risk.

Treasury securities trends are often a strong indicator of how investors think the Fed will steer the economy. And by that measure, the markets are expecting falling interest rates and decent growth.

The Congressional Budget Office estimated that if the House bill were to pass as written, the deficit would increase by almost $3 trillion.

Buying a bond is usually like going for ice cream (to a regular ice cream place): You pick your flavor, you pay, you enjoy a nice, predictable payoff. Lately though, that’s not the deal.

Investors expect a healthy economy and strength in the private sector, which is limiting the rise in corporate bond yields.

Both government and corporate bond yields have been climbing. For many companies, though, higher revenue more than covers the cost.

Investing in long-term government bonds and mortgage-backed securities hurt the bank as interest rates rose and bond prices plummeted.