A golden star tops the Christmas tree outside the New York Stock Exchange, Thursday, Nov. 30, 2017. (AP Photo/Mary Altaffer)
Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
In US president Donald Trump's ideal world, tax cuts will fire up the American economy, an outcome that has big implications for bond markets.For all the general talk of 2018 being another year characterised by contained levels of volatility and long-term bond yields, some investors do fear a potential void in demand for US credit and rates.US bond funds have seen nearly $200bn of inflows this year, according to EPFR, including $12bn devoted to long-term corporate debt funds.As economists on Wall Street project more than 50 and 60 basis point increases in the respective yields on benchmark 10- and 30-year Treasuries over the next year, the record high level of duration in the $8.6tn corporate debt market has sparked some consternation among portfolio managers.Duration on US corporate credit has never been higher, rising to a record 7.3 years this week, according to ICE BofAML Indices.Higher interest rates are broadly seen as negative for the US stock market, and when investors rush to sell stocks, havens such as US Treasuries benefit.
FOLLOW THIS ARTICLE