For instance, yields on 10-year Japanese Government bonds were at -0.09% and yields on 10-year German bunds were at -0.09%. The value of negative-yielding bonds rose to $13.4 trillion this month as negative rates and central bank bond purchases upend the debt market, the Financial Times reported.
“It’s surreal,” Gregory Peters, senior investment officer at Prudential Fixed Income, told the Financial Times. “It’s clear that central banks are dominating markets. There’s a race to the bottom. Central banks are the main drivers of this, it’s not fundamental.”
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Even if the Fed raises rates and puts pressure on Treasury bonds, foreign demand may still jump at the relatively more attractive U.S. government debt.
For more information on the Treasuries market, visit our Treasury bonds category.
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