The US Bond Market Puzzle: Higher Yields Amid Cuts
The economic theory suggests that when central banks cut interest rates, bond yields decline. Interest rates are the annual return investors receive from a bond. If the central banks issue new bonds at a lower rates, existing bonds – which yield a relatively higher return – will be received with higher market demand, thereby driving up bond prices. Consequently, their yield, defined as the quotient … Continue reading The US Bond Market Puzzle: Higher Yields Amid Cuts
