{"id":563884,"date":"2021-07-27T04:00:07","date_gmt":"2021-07-27T04:00:07","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/07\/27\/us-real-yields-fall-to-record-low-amid-growth-concerns\/"},"modified":"2021-07-27T04:00:07","modified_gmt":"2021-07-27T04:00:07","slug":"us-real-yields-fall-to-record-low-amid-growth-concerns","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/07\/27\/us-real-yields-fall-to-record-low-amid-growth-concerns\/","title":{"rendered":"US real yields fall to record low amid growth concerns"},"content":{"rendered":"

<\/a> Returns on US bonds that investors earn after inflation have reached record lows<\/strong>, as concerns grow over the sustainability of the economic recovery, according to the Financial Times<\/a>. As of Monday, the real yield on 10-year bonds fell further into negative territory, reaching a record -1.127%.<\/p>\n

The US bond market has gone into reverse in recent weeks<\/strong>, having suffered a sharp sell-off earlier this year on fears of rising inflation. But despite inflation now accelerating at a pace not seen in over a decade, investors have piled back into bonds sending yields falling from almost 1.75% to less than 1.3% over the past four months.<\/p>\n

Analysts are split as to why investors are going long on bonds<\/strong> despite increasing concern that the Federal Reserve may tighten policy in response to rising inflation. Weak summer trading and investor positioning have been held up as possible reasons, but the recent rapid spread of the delta variant has some speculating that worries about the fate of the economic recovery may now be pushing investors into safer assets.<\/p>\n

Eurodollar futures seem to be bearing this out:<\/strong> Just a few weeks ago, market watchers were getting nervous that the Fed would take a hawkish turn to combat inflation, but moves in the eurodollar futures market suggest that traders may now be dialling back their expectations for higher interest rates in the years ahead, the FT<\/a> reports. Eurodollars futures, which investors use to speculate on future interest rate changes, have surged over the past three months, suggesting that traders now think the Fed will be less aggressive in how it unwinds its stimulus program and raises interest rates.<\/p>\n

In other financial news worth knowing about this morning:<\/strong><\/p>\n