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Institution: US Treasury Bonds May Be Overbought
Summary: According to Jinshi's report, US Treasury bonds have been rising in the past few days, pushing bond yields lower. John Silvia, CEO of Dynamic Economic Strategies, pointed out that this rally may be excessive. Silvia analyzed that the combination of 'expansionary fiscal policy and loose monetary policy' fundamentals, along with stubborn inflation pressures, suggests that ...
According to Jinshi's report, US Treasury bonds have been rising in the past few days, pushing bond yields lower. John Silvia, CEO of Dynamic Economic Strategies, pointed out that this rally may be excessive. Silvia analyzed that the combination of 'expansionary fiscal policy and loose monetary policy' fundamentals, along with stubborn inflation pressures, suggests that US bond valuations are high. He is particularly concerned about the five-year Treasury yield - currently around 3.6%, slightly lower than the 3.7% five-year inflation expectation shown in the latest survey by the University of Michigan. Silvia stated that this comparison means that 'even without factoring in tax considerations, the real rate of return is negative'.
