Moody's revises US outlook to negative
Moody's Investors Service has lowered its outlook on the U.S. government from stable to negative, citing a lack of effective fiscal policy and political polarization within Congress. And Fitch cut the U.S. long-term foreign currency issuer default rating to AA+ in August. Treasury yields are at risk of rising, which could affect the entire financial system.
In the secondary market, bond value is determined by their price and yield, which are inversely proportional. When bond prices rise, yields decrease, and when bond prices fall, yields increase. An increase in yield indicates lower demand for Treasuries, and investors may turn to higher-risk, higher-return investments instead.
To break down the factors that affect Treasury yields, we can categorize them into several areas: Investor confidence, monetary policy, inflation expectations, and emerging events. To learn more, check out course on moomoo Learn: Discover the bond market: A quick and easy guide
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