Rising government bond yields in the USA

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The prediction in March 2009 based on the SAMVA USA chart for increased concerns at this time associated with the burgeoning government debt is proving correct. In addition to a very low dollar, there are now increased expectations (concerns) that interest rates will rise.

 

Geithner Widens Bills-to-Bonds Gap With New Sales

 

Oct. 26 (Bloomberg) -- Treasury Secretary Timothy Geithner’s plans to lock in near record-low borrowing costs in 2010 may mean a second year of losses on longer-term bonds.

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“The Treasury will want a longer debt duration before interest rates rise,†said Tsutomu Komiya, an investment manager in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $105.8 billion. “We have to deal with sales, sales, sales. The huge issuance will make Treasury yields go higher.â€

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Yields on 10-year Treasuries, up from 2.04 percent in December, will jump to 4.19 percent by 2011, according the weighted average estimate of 57 economists and strategists surveyed by Bloomberg News. Two-year yields are 1.02 percent today, compared with 0.76 percent at the end of 2008.

 

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Higher yields may also hinder Fed Chairman Ben S. Bernanke’s efforts to cap consumer borrowing rates, his goal at the start of 2009, to lift the economy from its worst slump since the Great Depression.

http://www.bloomberg.com/apps/news?pid=20601087 & sid=auBVY_IxvAk4

 

Thor