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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Knighty Tin who wrote (31920)5/6/2005 9:17:51 AM
From: Tommaso  Read Replies (2) of 110194
 
>>> bond prices take a dive.<<<

I think that the shortage of 30-year treasuries has kept their prices up. State and municipal pension funds tend to commit a certain percentage of their assets to long treasuries as a matter of policy, maybe in some cases, a matter of law. When the new 30-year issues come out, and if the Fed keeps up this plodding series of interest rate rises on the short end, demand may slacken a little, rates will rise, and prices drop.

I am just suggesting that this could happen as well as the unwinding of the carry trade that you see.

Is there any set of statistics that shows exactly who is holding the long bonds? The government has to know since they send out the interest payments.
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