You are currently browsing the Capital Comments weblog archives for the day 8. August 2009.
8. August 2009 by Dan Walkow, CFA, CMT.
US Treasury Bonds lost 5.5 percent this year and are on a pace to post an annual loss for only the third time since Merrill Lynch started calculating returns. The index rose 14 percent last year as the global economy lapsed into the worst recession since World War II.
Yields on 10-year debt touched the highest level in almost two months after a report yesterday showed American employers eliminated fewer jobs than forecast in July and a gauge of manufacturing climbed to an 11-month high. The Treasury announced plans to auction a record $75 billion of notes and bonds next week and signaled that issuance of inflation-linked debt would rise in 2010.
Adminstered interest rates will be kept low by monetary authorities, for fear of knee-capping the economic recovery but the market determines longer term interest rates and trend for long term interest rates is up.
Long term mortgages and loans at interest rates of 3-4% will look like bargins of a generation not that many years from now.
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