As the debate continues to rage on the likely timing and scale of any global economic recovery, one ...
As the debate continues to rage on the likely timing and scale of any global economic recovery, one thing is certain. There will be more government bonds issued over the next couple of years. One must return to fundamentals ' supply and demand. Remember the macroeconomic factors affecting budget deficits ' supply ' are affecting investors' demand for bonds. Deficits are increasing due to lower tax receipts brought about by a drop in economic activity. This raises the supply of bonds. Yields have been falling as short-term rates are cut and inflationary expectations fall. This increases th...
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