Your English writing platform
Discover LudwigSuggestions(5)
Exact(11)
The second round, by contrast, has worked because the Fed is reducing the supply of bonds available for purchase.
However, some analysts argue there are risks that the supply of bonds is not big enough to accommodate a big expansion.
But the strategy pushed interest rates even higher, by further increasing the supply of bonds and forcing issuers to offer still higher rates.
Mr. Rosenberg said in addition to foreign central banks withdrawing their support from the Treasury markets, investors were "spooked by the supply" of bonds available for purchase.
It reduces bond yields in two ways: it signals that the central bank will hold short-term rates low for longer, and it reduces the supply of bonds.
So it's just supply and demand: estimates of the future supply of bonds are rising, so bond prices are falling -- and that means higher long-term interest rates (including mortgage rates).
Similar(45)
Central banks also use government securities in open-market operations to influence interest rates.In America and Britain the shrinking supply of government bonds has made bond yields less reliable as indicators of inflationary expectations.
But the supply of such bonds is finite.
Banks are scared that wild government borrowing will mean an excessive supply of new bonds.
Its current purchases outstrip the supply of new bonds by around £5 billion per month.
The reality here is that the supply of Treasury bonds is not a very important issue for the long term.
Write better and faster with AI suggestions while staying true to your unique style.
Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com