yields go up when bonds are being dumped... the treasury yield curve steepened because ppl were dumping longer dated bonds relative to shorter dated bonds ( which still have buying support from the fed through QE )
Another aspect that is fairly confusing is the irony of expectations of inflation driving the appreciation of the dollar relative to other currencies (DXY), which is putting selling pressure on the crypto market or at least forcing consolidation... however, it’s inflation risk that drives the crypto market, BTC in particular... so how do we parse out inflation that drives crypto and inflation that doesn’t? (lol)
Yields increase as prices drop (lower demand, CMP, etc.)
From your bit here:
“If you can get paid a good yield with “no risk” why would you own gold, why would you own growth stocks like Tesla? The answer is, if you are managing institutional money, you wouldn’t. You’d take your safe yield and call it a day.”
It sounds as if you’re stating that institutional funds are being allocated to the bonds... however, wouldn’t that be keeping the rates down, not pushing it up?
My intuition was that bond investors were dumping their holdings in face of greater inflation expectations in order to trade the reflation of Fed expansion. But both the equities market and bonds are signaling positions are being dumped - if I’m understanding correctly?
Would love it little more light on the mechanics there.
yields go up when bonds are being dumped... the treasury yield curve steepened because ppl were dumping longer dated bonds relative to shorter dated bonds ( which still have buying support from the fed through QE )
Another aspect that is fairly confusing is the irony of expectations of inflation driving the appreciation of the dollar relative to other currencies (DXY), which is putting selling pressure on the crypto market or at least forcing consolidation... however, it’s inflation risk that drives the crypto market, BTC in particular... so how do we parse out inflation that drives crypto and inflation that doesn’t? (lol)
Yields increase as prices drop (lower demand, CMP, etc.)
From your bit here:
“If you can get paid a good yield with “no risk” why would you own gold, why would you own growth stocks like Tesla? The answer is, if you are managing institutional money, you wouldn’t. You’d take your safe yield and call it a day.”
It sounds as if you’re stating that institutional funds are being allocated to the bonds... however, wouldn’t that be keeping the rates down, not pushing it up?
My intuition was that bond investors were dumping their holdings in face of greater inflation expectations in order to trade the reflation of Fed expansion. But both the equities market and bonds are signaling positions are being dumped - if I’m understanding correctly?
Would love it little more light on the mechanics there.
Thanks!