This, at a certain level, is simply the consequence of benchmark rates in the US jumping from 0 per cent to over 5 per cent in a span two years.
But at a time when all of Wall Street seems fixated on whether the Federal Reserve will cut interest rates this year, it's easy to lose sight of one important fact: That after being held hostage by zero-rate policies for almost two decades, US Treasuries are finally reverting back to their traditional role in the economy.
That is, as a source of income that investors can lock in and rely on. The numbers tell the story. Last year, investors pocketed nearly $900 billion in annual interest from US government debt, double the average over the previous decade. That's set to rise as over 90 per cent of Treasuries carry coupons of 4 per cent or more.
This story is from the May 07, 2024 edition of Business Standard.
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This story is from the May 07, 2024 edition of Business Standard.
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