eichengreen184_(Kent Nishimura Los Angeles Times via Getty Images_treasury Kent Nishimura / Los Angeles Times via Getty Images

Certain Uncertainty in the US Bond Market

With interest rates on ten-year US Treasuries close to 5%, more than triple the levels of two years ago, bond yields are attractive once again. If the fundamental factors driving them haven’t changed dramatically, then it’s possible that interest rates will fall and bond prices will recover now that the inflation scare has passed.

SINGAPORE – The last two years have been catastrophic for investors in US Treasury bonds. By one measure, 2022 was the worst year for such investors since 1788. Bond prices are poised to fall again in 2023, making this the first time in US history that they declined for three consecutive years.

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