Sentences with phrase «rising nominal yields»

Based on our analysis, the split between sectors that benefited from rising nominal yields and those that suffered was clear: Defense - oriented sectors — those that are income - driven but light on growth — fared worse as the opportunity cost for holding them grew.

Not exact matches

We see higher inflation expectations, rather than rising real yields, driving rises in nominal bond yields.

Medium - term inflation expectations of financial market participants, as implied by the difference between nominal and indexed bond yields, have risen to around 3 per cent in October, from less than 2 per cent at the beginning of the year.

Inflation expectations, as measured by the difference between yields on 10 - year nominal Treasury notes and Treasury inflation protected securities (Tips), have risen to 2.25 per cent from a low of around 2.10 a month ago.

Despite the sharp rise in inflation expectations, 10 - year breakevens (the difference between the yield on a nominal fixed - rate bond and the real yield on TIPS) remain depressed relative to their long - term history.

At a 10 - year Treasury yield of 1.7 %, interest on reserves of 0.25 %, and a monetary base now at about 18 cents per dollar of nominal GDP (see Run, Don't Walk), further purchases of long - term Treasury securities by the Fed would produce net losses for the Fed in any scenario where yields rise more than about 20 basis points a year, or the Fed ever has to unwind any portion of its already massive positions.

Think of 1979 - 82: by the time bond yields were nearing their peak levels, bond managers were making money in nominal terms with rates rising because the income from the coupons was so high, and it set up the tremendous rally in bonds that would last for ~ 30 years or so.

In this situation, the real yield would rise on both nominal Canadas and RRBs.