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110 sats \ 2 replies \ @kilianbuhn 25 Mar \ on: US government bonds are selling like hot cakes econ
The reason for this is simple. Bonds fell in value when interest rates started rising. They'll do the mirror opposite when interest rates fall again. Bonds might rise in value when interest rates fall.
Investors don't plan on holding them to maturity. It's a trade with a 6 month to 2 year time horizon.
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For some you might be right but these bonds are being issued at a much higher interest rate compared to what we have seen the last 20 years so those who think inflation will fall back down to 2% like the Fed wants love these things because they get even better with age!
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