Does anyone know what effects the 10 year tresury yield? I am trying to understand what makes it go up or down. I heard that if bonds are selling alot, then that can drive down the bond yields, which in turn drive down the tresury yields. Is this correct? Are there any other factors that can make the tresury go up or down?Any help would be appreciated.
Bond yields are completely set by supply and demand.You've got the basics down, but remember that every transaction has a buyer and a seller. The point is, if a lot of people want to buy, in order to interest the sellers, they'll have to offer to buy at a higher price than the going rate. With a bond, price and yield have an inverse relationship.Once you buy a bond, yield is set until you sell it or the bond matures.As to what affects supply and demand, well there are dozens of factors. The Fed's interest rate. What people expect interest rates in the future to be. What people expect future performance of other assets to be. Economic statistics. A lot of people retiring at once and switching from stocks to bonds.
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