There is also a game of value for the long-term interest rate hike

The United States auctioned a group of short-term bonds on Tuesday night, winning the bid rate to the highest level in more than nine years, reflecting the sharp drop in demand for U.S. bonds by investors. The market also believes the funds will continue to be drawn from the bond market. However, the real situation is not the case. Although the short-term debt rose sharply, the long-term interest rate did not rise or fall after the auction. For the first time in more than three days, the long-debt interest rate recorded a drop, which reflected the debt interest rate rose to a more attractive level After the capital has been back into the bond market.

Recent developments in the long-term interest rate on the US long-term debt have caught the attention of the market, especially the U.S. Treasury this week’s auction worth a total of 258 billion U.S. dollars. In the first day of bidding, a batch of three-month and six-month treasury bills were traded at the highest rate of more than nine years, reflecting investors’ disappointment over the U.S. debt. Affected, the yield on U.S. two-year bonds rose to 2.26%, the highest in more than nine years. Analysts generally believe that the yield on the 10-year U.S. Treasury note is expected to rise above the 4-year high of 3% this week.

Low inflation rate of interest rate policy variables

Although the short-term yield was broken, the long-term interest rate rose instead of going up. The 10-year U.S. debt index retreated again after rising to nearly 92-year high of 2.92% on Tuesday. It fell to 2.87% Wednesday, saying the funds have not been hit The effect of the auction bond results evacuated, but rather accelerated the inflow of the bond market.

Similar developments occurred in the U.S. bond market last Thursday when the 10-year debt rose to 2.94% without any further Powei downgrades, but rather reversed repeatedly, indicating that funds were refunded to the bond market due to high debts and prevented the interest rate from further rising .

US debt rose sharply in the early round of the round, mainly due to concerns about inflation and warming. However, since the U.S. announced the unexpected increase in the CPI last Wednesday, there was no further reaction from the market, reflecting investors’ doubts as to whether the real inflation has risen. . According to the latest forecast, the latest PCE core index used by the Federal Reserve as a reference index will only increase 0.3% month on month, not much different from the increase for the previous month, indicating that the current inflation rate in the United States is still low, There are signs of rapid rise.

As long as inflation in the United States is still not significantly higher than expected, the Federal Reserve will not easily change the pace of rate hikes and the funds will be drawn to the debt market by high interest rates. Once the demand for bonds in the market is strengthened again, the upward trend of the debt interest rate will slow down again. It is not easy to redress the bonds.