once FED lowers interest rates, it's likely to put downward pressure on yields - assuming term premia doesn't increase by more
Illya Gerasymchuk
once FED lowers interest rates, it's likely to put downward pressure on yields - assuming term premia doesn't increase by more
in the end, the yields will be higher than in the last 20 years, for the same FED funds rate
QE/liquidity injections will further devalue USD
liquidity abundance leads to the narrowing of spread between riskier and safe assets (mostly government bonds)
safe assets fall in price, with their yields increasing towards the riskier ones
US bond yields are high under tighter monetary conditions - liquidity is pro cyclical
