Explanation:

When we look at many macroeconomic materials, especially when we talk about asset prices, we always mention a 10-year national debt. For example, when we talk about bank financing or bond fund losses, we will also talk about the yield of 10-year government bonds.

As an asset endorsed by national credit, national debt is the safest asset and has a strong hedging effect.

The yield of ten-year treasury bonds refers to the annualized yield of treasury bonds with an average investment period of 10 years, which fluctuates with the market and is uncertain.

The yield of ten-year treasury bonds is the anchor of all assets, and all asset prices are basically priced with reference to the yield of ten-year treasury bonds. (In other words, US debt is called the anchor of global asset pricing. )

What is the function of this indicator?

This indicator has many uses, for example, it can usually be used as a risk-free rate of return, and not only the bond market but also the stock market will be affected by this rate of return. The yield of ten-year national debt can also reflect the national economic development. Generally speaking, the higher the rate of return, the higher the economic growth rate of this country. Instead, it reflects the country's low economic growth rate.

For example, the developed countries in Europe, because they are already relatively developed countries, have very low economic growth rates without new breakthroughs in economic development, and the ten-year bond yields of such countries are all negative. Among the developed countries, the best economic development is the United States, so the yield of the ten-year national debt of the United States is also the largest among these countries.

Take a beautiful country as an example.

Since the internationalization of the US dollar, the Federal Reserve can be said to be a global central bank in a practical sense. M The Federal Reserve releases water, the US dollar index goes down, and the US dollar flows to all parts of the world at the same time, which will push up the asset prices of the whole world. When the Federal Reserve recovered money, the dollar index rose, so the dollar returned from all over the world and asset bubbles burst everywhere. Among them, the yield of 10 M bonds will become the pricing benchmark of global asset prices, that is, the de facto global risk-free rate of return.

Whenever people have insufficient confidence in the future economic situation and think that there will be a recession? Will buy a large number of treasury bonds to hedge and obtain a stable risk-free rate of return. Therefore, we attach great importance to the performance of the Federal Reserve and 10-year treasury bonds.

The Influence of Ten-year Treasury Bond Yield on Bond Market

If the yield of treasury bonds rises after ten years, the bond market will fall, and on the contrary, the bond market will grow. In the long run, the yield of national debt is spiraling down, because when the social economy develops to a certain extent, the rate will drop.

Impact on financial institutions

The yield of ten-year treasury bonds has a great influence on banks. Usually, the higher the rate of return, the more financial institutions make money, the lower the rate of return, and the less financial institutions make money. For example, financial institutions in many European countries do not make much money or even lose money.

Summary:

The yield of ten-year treasury bonds is the anchor of asset pricing in financial markets, and bonds, stocks, futures and even real estate are affected by it. Ten-year treasury bonds are the best varieties of medium and long-term treasury bonds, because ten years often include an economic cycle, so the yield of ten-year treasury bonds is a good indicator to predict economic trends.

The yield of national debt also reflects the degree of capital shortage in a country's money market. The rise in the yield of government bonds means that fewer people buy government bonds. In the short term, there are two situations: first, other major asset markets are in good shape, taking away the bond market funds; Second, all asset markets have less funds and tight liquidity.