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December
19
2017

Bad Juju! US Treasury 10Y Term Premia Crushed
As Fed Unwinds Treasury Note/Bond Holdings
Anthony B. Sanders

Its going to be bad juju (or in coming weeks) for some Treasury investors as The Fed continues its “great unwind” of their $4.4 Trillion balance sheet.

As The Fed dumps their Treasury Note/Bond holdings, the 10 year Term Premium declines.

The Term Premium is the compensation that investors require for bearing the risk that short-term Treasury yields do not evolve as they expected.

Have a holly, jolly Christmas as The Fed unwinds its balance sheet!

 

 

This is the online course note site for Banking and Financial Markets for Anthony B. Sanders, Distinguished Professor of Finance at George Mason University School of Business.

 

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