registered US Treasury bond market Their largest gains in years in 2023, especially during the months of November and December, according to the Bloomberg US Treasury Index, while short-term bond yields, which are more sensitive to monetary policy changes, declined further, making yield curve spreads steeper or less reflective.
Bonds rise with expectations of interest rate cuts
As for expectations for the year 2024, many strategic experts believe… US interest rates According to Bloomberg, short-term bond yields will continue to decline once the Fed lowers its target for the federal funds rate from 5.25% to 5%, with most expecting cumulative cuts of between one or two percentage points.
The Bloomberg US Treasury Index rose 4.1%, its first full annual gain since 2020, when the Corona pandemic caused a global recession. The best months for the index were November (3.5%), December (3.4%), March (2.9%), and January (2.5%), while the worst months were February (-2.3%) and September (-2.2%).
2023 changes to standard returns:
For two years, – 18 basis points
For five years, – 16 basis points
For ten years, +0.4 basis points
For thirty years, +6.5 basis points
Bloomberg said: Yields witnessed a winding path during the first part of the year after the regional banking crisis in March, which raised doubts about the economic outlook. Yields began to rise continuously in May with increasing expectations that the Federal Reserve would raise interest rates again, in addition to strong economic data and stable stocks. Regional banks and the US debt ceiling suspension agreement.
10-year bond yields reached 3.25% in April, their lowest level this year, while they rose to a peak of approximately 5.02% in October.
Elimination Federal Reserve Bank Interest rates last increased in July, the 11th increase since March 2022.
The US Treasury market recorded its first annual gain since 2020, as slowing growth and rising inflation reinforced the view that the Federal Reserve may have finished raising interest rates. This result contrasts with the market’s performance during most of 2023. Benchmark yields rose to multi-year highs in October, as a result of the possibility that… Monetary policy strict indefinitely. The growth in the supply of Treasury bonds also spurred investors to demand higher yields. Treasury bonds reached their worst levels on October 19, with their losses since the beginning of the year amounting to 3.3%.
Events that affected bond movements:
March 10– The collapse of Silicon Valley Bank.
March 13– A sharp rise in global bond trading as expectations of raising interest rates faded after the US authorities took exceptional measures to boost confidence in the financial system.
March 15– Plans to acquire “Credit Suisse” after a decrease in deposits.
March 27– Weak auction of two-year bonds and supply of corporate bonds.
May 1– Manufacturing PMI and the supply of corporate bonds.
May 2– Weak data on job vacancies and sales in the stock market.
June 29– Strong GDP data.
October 12– Weak auction of 30-year bonds.
November 9– Weak auction of 30-year bonds.
November 14– Good CPI data.
December 13– Federal Open Market Committee decision regarding interest rates.
The US Treasury continued to increase auction volumes last August, announcing a quarterly plan that was more ambitious than most Wall Street traders expected. By contrast, the next plan announced in November includes smaller increases for longer-dated debt offerings than most traders expected.
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Bond market
2024-01-01 12:14:39
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