US Treasury Term Premia Lowest Since 2016

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

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Hold on. The Fed minutes are coming!

The Federal Reserve’s increasingly clear message that it’s standing pat on rates for now and may also adjust balance-sheet normalization plans has driven the 10-year Treasury term premium even more negative. The measure — a gauge of the extra compensation investors demand to own the maturity compared to rolling over a shorter-dated obligation over the same period — is at its lowest since July 2016, according to Federal Reserve Bank of New York data through Feb. 15. The premium could go lower still, should the central bank’s meeting minutes set for release Wednesday provide any additional confirmation that its policy tightening is on hold.


Meanwhile, back on the Treasury curve, we await The Fed minutes to see if inversion is coming.


Will The Fed soothe us over future tightening?

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