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Showing posts with the label Federal Reserve

Understanding US Treasury & Yields

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Just when the whole world coming for a rout, only US treasury yields shoot up to multi-months high. Investors might wondering why this happen. Some of our readers are posting these kind of question to us. We think this article might helps. US Treasury = US Government Bond Actually, we are referring to US Government 10 Years Bond. Generally, a government bond is issued by a national government (in this case US) and is denominated in the country's own currency (USD). Bonds issued by national government in foreign currencies are normally referred to as sovereign bonds. The yield required by investors to loan funds to governments reflects inflation expectations and the likelihood that the debt will be repaid. Also, government bonds were usually referred to as risk-free bonds , because governments could easily devalue their currencies or raise taxes to redeem the bond at maturity.  The Story of US Treasury Yields... Just like Base-Lending-Rate (BLR) for Malaysia, everything from mortgag...

Why so FEAR if US Federal Reserve stop QE ?

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Global shares tumbles to multi-months low, especially in Asia whom did well year-to-date thanks to Japan's Abenomics. Commodities and gold also can't spare from the bearish sentiment across investment markets. Reason? US Federal Reserve may stop/scaling down their bond-purchase program. Huh!!! Is this the real reason? Like what I always said, analysts always give a reason for whatever bull or bear markets (after it had happen). For me, the main reason was (again) profit-taking activities took place in view of the good performances during first half of this year. How about Federal Reserve's QE ? It's funny to blame Federal Reserve for the corrections. First, why Fed want to stop QE at the first place? It's because US economy is recovering well. Wasn't this a good news to global markets? Definitely. Then, why we're so fear if Fed stop QE ? Doesn't make sense, right? Anyway, like what I said, the real reason was profit-taking activities which is normal af...