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Thread: Interest rates move higher in one of biggest 2-day moves of year as tax bill moves closer to l

  1. #1

    Interest rates move higher in one of biggest 2-day moves of year as tax bill moves closer to l

    https://www.cnbc.com/2017/12/19/bond...investors.html

    Tax cuts will mean more government borrowing. Germany also announced they will be borrowing more than expected. Higher interest rates mean lower prices for bonds which have seen their prices benefit from more than a decade of falling interest rates. Higher rates also means higher costs for businesses which need to borrow.

    Bond yields snapped higher in one of the biggest two-day moves of the year, as Congress moved to turn the tax bill into law.

    The sweeping package would add to the deficit and signal more growth, both factors that could drive interest rates higher.

    The Treasury market move started in Europe, where German yields rose on the news of more German bond issuance than expected in 2018.


    U.S. government debt yields rose on Tuesday after House Republicans passed a sweeping tax overhaul, sending the stimulus bill to the Senate for a vote.

    The yield on the benchmark 10-year Treasury note rose to 2.463 percent at 2:55 p.m. ET, while the yield on the 30-year Treasury bond was also up at 2.825 percent. Bond yields move inversely to prices.

    Treasury yields are staging one of the sharpest two-day moves of the year, as the U.S. tax bill moves closer to becoming law.

    The House voted to approve the sweeping tax bill Tuesday afternoon, and it was next headed for the Senate.

    Strategists said the move, which drove the U.S. 10-year yield to its highest level since late October, started in Europe Tuesday. The German government's plan to issue more debt-than-expected next year pushed bund yields higher, and that acted like a magnet, pulling up yields across Europe and in the U.S. Treasury market.

    It's "the biggest two day rise in the 10-year yield since Sept. 12," noted Michael Schumacher, Wells Fargo head of rate strategy of the 11.3 basis points. The biggest two day rise was the 14.9 basis points in mid-January.

    "I've been crediting the impending passage of the tax plan. I think people have been waiting for it," said Andrew Brenner, global head of emerging markets, fixed income at National Alliance. He said the market is anticipating a stronger economy, possibly a more active Fed and a wider budget deficit.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    I am Zippy and I approve of this post. But you don't have to.



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  3. #2
    When you can borrow from the government at nearly zero, the market rates don't matter, except for the fact that when market rates go up, the Wall St. banksters will make more money via arbitrage.
    Twitter: B4Liberty@USAB4L
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    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  4. #3
    Lol. How many trillions in debt are we? And it's ALL because of THIS tax bill.
    Theye have refused their Assent to Laws, the most wholesome and necessary for the public good.

    Theye have erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

    Theye kept among us, in times of peace, Standing Armies

    Theye have combined with others to subject us to a jurisdiction foreign to our constitution,

    For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

    For cutting off our Trade with parts of the world:

    For imposing Taxes on us without our Consent:

    For depriving us in many cases, of the benefit of Trial by Jury:

    Theye plundered and destroyed the lives of our people.

    Theye are at this time transporting Armies of Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy of a civilized nation.

  5. #4
    Quote Originally Posted by Brian4Liberty View Post
    When you can borrow from the government at nearly zero, the market rates don't matter, except for the fact that when market rates go up, the Wall St. banksters will make more money via arbitrage.
    Who is borrowing from the government and using arbitrage to make boatloads of money?

    Current (as of today) amounts of money banks have borrowed from the Fed: $65 million- with an "m". Not even one billion.

    https://fred.stlouisfed.org/series/BORROW
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    I am Zippy and I approve of this post. But you don't have to.

  6. #5
    Quote Originally Posted by phill4paul View Post
    Lol. How many trillions in debt are we? And it's ALL because of THIS tax bill.
    Keeping in mind that the $1.5 trillion the tax bill is expected to add to the debt over the next ten years is in ADDITION to the $10 trillion projected to be added without it. $33 trillion debt by then. As interest rates rise, the costs of financing that debt also goes up.
    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    "Truth isn't truth"- Rudy Giuliani

    "China has total respect for Donald Trump and for Donald Trump's very, very large brain," - Donald Trump.

    I am Zippy and I approve of this post. But you don't have to.

  7. #6
    Quote Originally Posted by Zippyjuan View Post
    Keeping in mind that the $1.5 trillion the tax bill is expected to add to the debt over the next ten years is in ADDITION to the $10 trillion projected to be added without it. $33 trillion debt by then. As interest rates rise, the costs of financing that debt also goes up.
    How much spending is in the tax bill?



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