-
The 10-year U.S. Treasury is on course for three consecutive years of losses.
-
A consecutive slump would represent the longest period of losses since 1787, according to the Bank of America.
-
The drop comes after U.S. Treasury bonds suffered their biggest annual loss since 1788.
Our chart of the day comes from Bank of America and shows US Treasuries heading for their longest period of losses on record, dating back to 1787.
The US 10-year Treasury is on track to lose for the third time in a row. The 10-year Treasury bond fell 3.9% in 2021 and fell 17% in 2022, marking its biggest annual loss since 1788. This year, interest rates are down 0.3% so far.
“10-Year Treasury Bonds on Course for Third Consecutive Loss… has never happened in the 250-year history of the US Republic. Reflects a staggering 40% jump in US nominal GDP (growth + inflation) since the trough of the COVID-19 crisis in 2020,” said BofA investment strategist Michael. Hartnett said in a note Friday.
The bond pain has been caused by aggressive rate hikes by the Federal Reserve. Since March 2022, the Fed has raised interest rates eleven times, bringing the effective Fed Funds rate from nearly 0% to over 5% today. As interest rates rise, bond prices fall, which is why bonds have performed so poorly.
Despite the long period of pain in fixed income, investors poured $1.7 billion into bonds this week, marking the 23rd straight week of inflows, according to BofA.
Read the original article on Business Insider
