Yield Curve Quotes

Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.

Starting in the wake of the 2008 GFC (Global Financial Crisis), market observers have warned of a crash in the bond market. Initially, it was believed that the trillions printed to bail out the banks would cause inflation and, therefore, a flight from bonds.

The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is a sort of different type of problem.

Gentlemen who prefer bonds don't know what they're missing.

One component of the leading economic indicators is the yield curve. Bond investors keep a close eye on this, as it illustrates the spread or difference between long-term interest rates and short-term ones.

The sale of Treasury bonds, notes, and bills finances the U.S. government, and those securities are, in turn, a primary vehicle for savings for a wide range of U.S. households. Treasury securities are also an important source of collateral within the financial system.

The Federal Reserve can only buy Treasuries and agencies, and moreover quantitative easing typically involves buying longer-term Treasuries and agencies in terms of bills, for example.

The FOMC has considerable control over short-term interest rates. We have much less influence over long-term rates, which are set in the marketplace.

If you are prepared for some risk, junk bonds pay about 5%, but they tend to get whacked when interest rates rise. Same with lower-yielding but higher-quality corporate bonds.

The HoLee model was the first term structure model. I remember reading their paper soon after it was published and as it was fairly different from many of the other papers that I had read, I had to read it quite a few times. I realized that it was a really important paper.

Bonds despite their ridiculous yields will not easily be threatened with a new bear market.

For investors who do want to speculate in high-yield bonds, one alternative may be a junk bond mutual fund, which can offer investors the relative safety of diversification.

Most companies can survive even if their debt ratings are lowered below investment grade, although they will have higher borrowing costs.

Bond investors are the vampires of the investment world. They love decay, recession - anything that leads to low inflation and the protection of the real value of their loans.

When bond prices fall, interest rates soar, with painful consequences for all borrowers.

The big question is: When will the term structure of interest rates change? That's the question to be worried about.

Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.

I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative.

The expectation of gradual policy normalization should reduce the likelihood of outsized movements in interest rates.