 "Government bonds, bond yield")
No major institution in the US has so poor a record of performance over so long a period as the Federal Reserve, yet so high a public reputation.
– Milton Friedman (1988)
The default risk on the US government bonds may be small, but the interest rate risk is huge. The 10-year US Treasury bond yield touched 4.87 per cent in early October 2023, up from a low of about 0.5 per cent in 2020. Relatedly, some 10-year “safe” US government bonds slumped by 46 per cent!
It is interesting that much of the interest rate risk is not due
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
