Name: Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market（Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market）
Uploaded: 2024-03-04T22:29:12.000Z
Duration: 12 min 23 s
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When investors think of financial markets, the

様態の副詞

first thing that likely comes to mind is the stock

market. But there's actually a bigger, less

flashy counterpart to the equity market: the bond

market. Probably the biggest market out there

when it comes to capital markets, you hear a lot

about the equity side, but in reality the bond

At the heart of it lies one of the safest assets

Treasury bonds. As interest rates have risen

over the past few years, treasuries have offered

The US Treasury market is a large market in the U.S

. fixed income world, it's giving you higher yield

The yield levels and the income opportunity is is

much, much more interesting and attractive

We've been used to having incredibly low yields here

Buyers of US treasuries have been changing, and

the shift could have broad implications for the

We've seen over the last couple of years is we've

seen a declining appetite for US government debt,

The US sort of stood out across all the other

countries as being so dependent on foreign

China's pulled back as a buyer, Japan has pulled

China and Japan have not over many, many years been

huge buyers. I feel like we have not paid attention

to the treasury market because it was a market

Fed. Now it's a market for all of us and it's giving

you better yield. So it's something which we should

So why are major buyers fleeing the Treasury

market? What's the impact on yields and the economy

at large? And just how can investors best

Treasuries is a key one, which is basically the

federal government issuing debt for their

Almost half the bond market is the US Treasury

market, according to the Bloomberg Aggregate Bond

Index, which tracks the performance of US

investment grade bonds and is widely considered

Us treasuries account for over 42% of the index.

So I almost view the Treasury market as the

benchmark bond market, which is used for every

And sets the tone as sort of the risk free rate for

all the other investments in the bond market.

So those bonds are considered to be very,

very safe investments because they're guaranteed

If you're going to invest a dollar into Treasury

bonds, you're going to get that that dollar back.

While the Federal Reserve doesn't directly control

short-term borrowing rates or the Fed funds

rate can indirectly feed its way through the

market. That's another thing that we've seen

consistently over the past year and a half or so

borrowing rates, say by a quarter point or half a

followed in kind. If the Fed's going higher, bond

holders generally say, okay, we want more yield

as well. US Treasury buyers can generally be

classified into one of two sub categories:

On the one hand, you have your domestic buyers, of

which the Federal Reserve is one of the largest

Just a year ago, the Fed was a big buyer.

But the Fed steps in when they are doing QE,

quantitative easing, is where they step in as a

buyer. You have pensions, insurance companies, money

market funds, real money investors as well as banks

And on the foreign side, we see pretty good demand

treasuries, both Japan as well as China are very

It's a much smaller buyer base today than it was

ten, 15 years ago, but it's still a solid source

of demand. Historically, perception has always been

that given the fact that treasuries are very

desired by both domestic as well as foreign

investors, that there's always demand for

Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market（Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market）

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Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market（Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market）

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