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Questions tagged [bonds]

Bond markets and legal aspects of bonds. For government debt use the tag "government debt" unless the fact the the debt is in the form of bonds has significance.

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What does the Fed do with their profits?

As far as I understand the system the Fed prints money which it then uses to buy bonds. Bonds are basically statements of debt meaning that the Fed receives interest from the parties it has bought the ...
Philogy's user avatar
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2 answers
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Why is the inverted yield curve a good predictor of impending economic recession?

The inverted yield curve has often been cited as a good predictor of impending economic recession. What are the reasons to explain why is it a good predictor? Is the inverted yield curve a cause or ...
curious's user avatar
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How to Calculate Bond Yields

According to Bloomberg, the coupon rate on a 10-year UK government gilt is 4.75%. Bloomberg also states that the yield is currently 0.47%, and the market price £144.57. The UK Debt Management Office (...
Ryan Walter's user avatar
29 votes
4 answers
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Why do people buy negative interest rate bonds?

I get that people buy long term government bonds, because of how safe it is, and if there would be a recession the government would just print more money and could pay it back. But why would anyone ...
curiousTrader's user avatar
7 votes
2 answers
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How did Portugal draw down their interest rates on pubic debt?

I notice that Portugal had a very high interest rate on its national bond issues back in 2012 but since then it has drawn down significantly: How were they able to decrease the interest rate?
Lassie Fair's user avatar
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3 votes
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What happens when government bonds purchased as part of central bank quantitative easing (QE) reach maturity?

Does the central bank ask the government to pay or are they rolled over?
sba222's user avatar
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2 votes
3 answers
349 views

What do interest rates tell us about the state of an economy?

I seem to have a misconception about what interest rates mean. On one hand, they signal how high a government's demand for money is, because if a government is ever in any serious need of money, they ...
J. Mini's user avatar
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5 votes
2 answers
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Limits to Quantitative Easing Programmes

I have been reading recently on the quantitative easing programmes by the ECB and the BOJ, see http://www.cnbc.com/2016/04/07/what-the-bank-of-japan-boj-will-do-now-that-negative-rates-have-...
Trajan's user avatar
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Why is an inverted yield curve NOT a good predictor for recessions except in the US?

I am trying to better understand the mechanism (if there is one) behind an inverted yield curve predicting - or causing, as some would argue - a recession. In order to do that, I'm trying to ...
Candamir's user avatar
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4 votes
1 answer
369 views

Why does falling global bond yields signal coming deflation?

This article suggests that, "Bond markets are signalling something very nasty coming down the road at us – an all encompassing, worldwide deflation. " I cannot understand why bond yields falling ...
Trajan's user avatar
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3 votes
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Does the initial bond price equal the face value?

When a bond is issued, does the buyer necessarily pay the face value? (I am not talking about consols or zero coupon bonds, just about an ordinary bond that, for simplicity, pays a coupon once a year.)...
Richard Hardy's user avatar
2 votes
2 answers
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Relationship between default risk and value of bond

In particular Mortgage-backed securities. I've read from a book that underestimating the risk of default is tantamount to overestimating the value of the bond, giving rise to a bubble in MBS. I'm ...
sendmeat's user avatar
2 votes
2 answers
117 views

Federal Reserve Interest

Banks have higher interest rate for debts than deposits to make money but does the U.S. treasury have the same interest rate for loans and deposits?
Alius Gobez's user avatar
2 votes
1 answer
330 views

How do you calcualte Yield To Maturity, given only the coupon rate and current required rate of return?

Suppose today a 10 per cent coupon bond sells at par. Two years from now, the required return on the same bond is 8 per cent. What is the YTM? ^That's a question I've been asked and have literally no ...
Azman's user avatar
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2 answers
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Who owns German debt?

I know that Germany has huge external debt. I don't know how to find out which entities own this and especially which country they belong to.
pablo's user avatar
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Why did Greenspan think rate hikes would increase treasury term premiums?

Greenspan once called long-term treasury yield's continued downtrend despite his multiple rate hikes a "conundrum." The Fed has research on what is often called "Greenspan's Bond Yield ...
Arash Howaida's user avatar
1 vote
1 answer
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Eurodollars - the real reason for the "Greenspan conundrum?"

While the jury seems to still be out on a similar question I posed earlier: Why did Greenspan think rate hikes would increase treasury term premiums?, I have recently begun entertaining an entirely ...
Arash Howaida's user avatar
1 vote
1 answer
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How do you benefit from a fall in interest rates in general as a creditor of public bonds?

I’m reading about England debt in 1819 and how interest rate benefited its creditors. The country had a public debt of more than 250% of the GDP. With peace at last achieved, London is faced with a ...
Revolucion for Monica's user avatar
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Does China issue treasury bonds too?

The USA is issuing a lot of treasury bonds and investors are buying it. But does China issue such bonds too? If yes, then how many such bonds did they issued and who are the largest owners of those ...
Joe Jobs's user avatar
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Most significant factors in the price of a goverments bonds

As a follow up on Long-,short-term interest rates and inflation. Inflation is clearly a factor(tho not possible to model mathematically) when it comes to the market price of a bond. I can think of ...
user123124's user avatar