When investors think of the financial markets, the first thing that likely comes to mind is the stock market.
But there is a bigger, less-flashy counterpart to the equity market: the bond market. At the heart of the fixed income space lies U.S. Treasurys, one of the safest investments in the world.
“We have not paid attention to the Treasury market because it was a market for foreigners or for the Fed,” said Priya Misra, fixed income portfolio manager at J.P. Morgan Asset Management. “Now it’s a market for all of us, and it’s giving you better yield. So it’s something which we should not ignore.”
Buyers of U.S. Treasurys have been changing, with major players including China, Japan and the Federal Reserve seeing their respective holdings decline in recent years. The shift could have broad implications for the U.S. economy.
“What we’re observing is that [the new buyers] are a lot more price sensitive,” said Anders Persson, global fixed income chief investment officer at Nuveen. “They’re just not quite as sticky.”
Watch the video above to find out more about why major buyers are fleeing the U.S. Treasury market, the impact on yields and the economy at large, and how investors can best navigate the market going forward.
Chapters:
0:00 Introduction
1:56 The $26.5 trillion U.S. Treasury market
3:29 Who are the buyers?
4:48 Changing of buyers
7:32 Impact on the economy
9:58 What’s next?
Produced by: Jeff Huang
Graphics by: Christina Locopo
Narrated by: Jordan Smith
Supervising Producer: Jeff Morganteen
Additional Footage: Getty
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Why China, Japan And The Fed Are Shaking Up The $26 Trillion U.S. Treasury Market
source
Of course the market and banks' hair are on fire. Treasury bonds have ALWAYS been a safe counterpoint – not to mention a haven – to the extremes of a volatile market. I'm sure more people are aware of and buying Tbills now than the history of it combined. Market had their bull run from 2008-2022, time to take a back seat.
Higher for longer is the new normal. Plan accordingly.
Fighting the closest allies and bombing the weakest both couldn’t really fight back. If you followed sino America relations you will know G2, two nations closely working together on every issue of the world. This was offered to china to carry the burden of American debt with Chinese production capacity, then financial meltdown and china backing out. We know the rest. And good luck to the Indo-American cooperation 😂
With the media flooded with economic data, it's crucial to focus on the fact that stocks historically bounce back despite downturns. I choose to ignore the noise and stay invested. I've allocated $300k for the market anticipating a crash. Any recommendations?
"I have invested in bonds. James Bonds."
Why the bond market disruption?
1. Trade balances. The US no longer importing oil means fewer dollars flowing overseas that used to return to buy treasuries.
2. Treasuries are emergency reserves for the world. Covid was an emergency that is still echoing around the world. They have been selling treasuries because they are the only asset that can be sold in any quantity without destroying the value of your remaining investment.
3. Trump literally multiplied US debt just to give corporations and the rich a big tax cut. Biden also had to add a bunch of debt to rebuild the economy post covid.
4. We've allowed massive wealth accumulation in the hands of people who do not support freedom. They have chosen to invest in seizing power and assets from voters instead of maintaining the infrastructure and consumer base that allowed many to build their wealth.
5. Reversing QE is how the above factors were allowed to poison the entire market in a way that will eventually bankrupt the country. No one can claim QE is a viable long term strategy, but anyone with basic money management skills knows that solving a budget issue doesn't start with increasing your expenses or quitting your job. QE should have been continued until a comprehensive transition plan could be implemented. That should have been a program that borrowed a trillion or so at those 1% interest rates and investing it into the economy in a way paid all of the money back with a return of more than one percent while at the same time growing the economy (or various other long term profitable things) so that we not only pay off the borrowed money but increase tax receipts to pay off other debt. Synergy is a long forgotten concept but it basically means do things that pay for themselves and then to use the extra capacity you've already paid for to do other things. Investing trillions you borrow at 1% for a 2% return is very profitable. When those trillions are invested in things that also grow the economy and grow tax receipts you can multiply your profit almost as many times as you want.
Nvidia stock is a fuqqing scam ppl. They cashing out on Nvidia while you're buying. And buying your dirt cheap stocks that y'all are selling like Nio, tesla and Boeing😂😂😂 at more than 65% discount.
I'm buying Tesla 65% off, selling Nvidia 114,000% up 😂 like the rich doing but they don't want you to know. Fuqq the fake new!
In light of the ongoing global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments.
ponzi scam
Hard fact of life that the quality of US leadership ( Biden/Trump)is declining and all sorts of signs of decline in economic plus politics (i.e. rise of fake money cryptocurrency, involvement in war in Ukraine/Gaza, migration issues, education quality issues, increase of racist activities, pure bubble in wall street, illegal seizures of foreign assets, unpredictable trade sanctions, sudden security measures against foreign students coming in for study, unwise political policies on key allies , technological trade-war. Hence loss of confidence in US governance issues.
The more bears the better. Boomers are looking for yield, especially with the stock market so expensive.
This whole comments section is nothing but bots LMAO
BRICS IS WORKING IT OUT…JUST WAIT.
Don't even touch it with a piece of stick.
Then cones devaluationand depression.
Figured it out hav you…
nice commercial 👍
Conflict of interest all around
Western Union won't directly give you Chinese Yuan (CNY) in the USA. Their service works by facilitating transfers, not keeping physical foreign currency on hand.
Western Union allows you to send USD which is then converted to CNY for the recipient in China. They offer a few payout options in China:
Bank deposit: The recipient receives CNY directly deposited into their qualifying bank account in China.
Cash pickup: The recipient collects CNY in cash from a Western Union agent location in China.
While you can't walk into a Western Union in the US and get CNY, it's a convenient way to send money to someone in China who can then receive it in their preferred form (cash or bank deposit).
There's no way I would be into buying of US treasuries. If the big fish are doing then pretty good indicator that you should be doing the same as well. And with the US dollar losing it's reserve status more and more each day thus other currencies being used in international trade then govs have less need for US treasuries to pay those bills thus they buy less and less.
Many of the BRICS+ nations are de-dollarizing so the FED and the suckers will be the buyers and then it collapses and they loose but the FED gets made whole and the little people gets the screwing
A bond is a promise by the borrower to pay back the capital with interest. Its only collateral is a paper with nothing more than a promise to repay with interest at whatever interest on the coupon. The question is why would anyone choose to buy a promise to pay versus the alternative of buying shares in a listed company with a proven business model which has a viable asset base that generates income and profit that pays a regular dividend. Bottom line is what an investor gets in return for his investment with an assured and tangible business model whose financials are subject to audit and governed by commercial law with financial statements to show tangible business practices within the self-checking rules of competition that are investors' safety nets. A bond is basically a promise by the borrower to pay back with interest but it has no assured defined business plan. It is just a blank check!
Too much debt to GDP and we have been running deficits for decades, in addition due to increase in
interest rate, we have to print more money to pay earnings and to service our debt!
Pretty straight forward. Oh, let’s not forget the unfounded liability…, SS for the seniors 😅😰
Game over!
INCORRECT. The Fed follows the bond market – the only effect it can have on it is direct monetization (inflation) or QT (deflation). It's a small impact compared to the market moves.
BRICS .
I don't get CNBC's presentation style. What's the point of showing me a view of a laptop, which is in-turn showing me the view of the pundit?
Just show me the pundit (i.e., not mediated by a fake laptop).
One permutation of that, which I just noticed for the first time in this video, is the pundit sitting next to a laptop, in an otherwise bare room. What message is this supposed to send?
Sorry, I realize I'm not saying anything about the subject being reported on. It's just a thing about CNBC's style of presentation that's been bugging me for a while.
Though I do applaud the use of name-tags being used when we switch back to a pundit (even if we've seen them already). Lots of outlets don't do that, and I've often missed or forgotten their names by the time I see them again.
Dollars appetite in free fall.
BRICS❤
China and Japan just dumped $500 million in bonds
the real China debt trap.
Ignore it on principle, the name bond comes from slavery bondage. Bonds keep the population in debt, debt slaves for the US overlords.
Is the treasure another central bank of america 😂😂😂
3 big bags of trash for sell!
Rational lack of trust in the US economy. Why us the people have to buy our own debt? Non sense.
The U.S. has way too much debt, too much to service right now, much less the future. Dollar depreciation will be the only possible consequence, and that means… inflation.
THIS IS TURTLE 🐢 ISLAND ❤🎉🎉😊😊
$26 Trillion
Nobody can fool the market long term . The dollar is a dying international reserve currency and most investors in bonds will be gradually disinvesting .
Let the US government force the rothschilds to mop up the bonds that will be dumped 😂😂😂
Lol buy Bitcoin plz 😂
She says it has given higher yeild in last 20 years. Fire her.
US has weaponized everything if any country don't follow US lines hence sanction imposed.
Where does 26 TRILLION even come from?🤣
The corrupt deep state has used the federal reserve to manipulate the interest rates, and at the same time lost us all now 34 TRILLION dollars!
If the federal reserve is producing the currency and buying the debt at the same time isn't that a ponzi scheme?
No mention of federal budget deficit which is rising by $1 trillion every 100 days
Why us hates China. China is a a communist country not a capitalist country. It's market isn't supposed to beat capitalism
This is what happens when you don’t understand how important that everyone else is to your economy and braking and not creating trade agreements.
The reason investors are fleeing the bonds is mainly the rise of interest rates that caused their holdings to decline in value.
So overall the treasury auctions have been a disaster but for no reasons given, its all magically turning around in 2024 according to these experts.
Comments are closed.