Report
The danger of imbalance in government bond markets
In the United States and the euro zone, we will probably see in 2022: The end of quantitative easing and, in the United States, a shift to quantitative tightening; Especially in the euro zone, a sharp increase in fiscal deficits (increase in military spending, household and corporate support spending, decrease in tax revenues due to the decline in growth); Investors rejecting bonds as real long-term interest rates remain negative. So how can the government bond market be balanced if bond issuance is increased while neither central banks nor private investors are buyers? Of course, there are forced buyers of US and euro-zone government bonds (other central banks, banks and institutional investors due to regulations). Also, global demand for risk-free bonds remains strong and the stock of bonds held by central banks remains high. But should we not consider a scenario where long-term interest rates rise more sharply than financial markets expect?
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.