Investors bought the dip in U.S. Treasuries on Monday following a significant move higher in yields on longer-dated maturities after the Fed's Jackson Hole symposium last week. Investors especially bought the 30-year bond, which saw yields rise to the highest level since mid-June on Friday.

Why it matters: A tug of war is developing in the bond market as inflation expectations are rising thanks to unprecedented central bank and government stimulus measures globally.

  • But central banks also are buying bonds, bidding prices up and keeping yields down.

Between the lines: Central bank support has pushed real yields on some investment-grade corporate bonds into negative territory as prices continue to decline and inflation expectations rise, per the Financial Times.

  • Investment-grade corporate bonds with maturities between one and three years posted negative real yields for the first time since March 2017, and bonds with maturities between five and seven years saw their real yields turn negative this month for the first time since 2013.

Yes, but: Real yields subtract inflation expectations from a bond's nominal yield, meaning investors are buying the bonds almost entirely on the expectation that they will rise in price. It suggests the bonds are seen more as a speculative asset than a safe store of value that will provide stable income.

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Dion Rabouin, author of Markets
Sep 29, 2020 - Economy & Business

China is attracting global investors' attention, boosting the yuan

Data: FactSet; Chart: Axios Visuals

The dollar strengthened against most of the world's currencies last week, as traders bought the greenback expecting an end to the reflation trade, but China's currency bucked the overall trend (pun intended) and is on pace for its strongest month against the dollar since 2008.

Why it matters: "What we do see is a strong Chinese economy, which is part of what’s behind the strong renminbi," Jason Brady, president and CEO of Thornburg Investment Management, told WSJ.

Dion Rabouin, author of Markets
Sep 29, 2020 - Economy & Business

The Fed remains untrusted

Data: Axios/Ipsos survey; Note: Margin of error for the total sample is ±3.2%; Chart: Andrew Witherspoon/Axios

The latest Axios-Ipsos poll shows that Americans' trust in the Fed has been unmoved since last month, with far more Americans saying they have not very much or no trust in the central bank, despite the Fed's latest shift in policy to average inflation targeting.

The impact: The new stance will keep interest rates lower for longer and is expected to provide a boost to job seekers and lower-income Americans who historically have not shared in the nation's prosperity.

Updated 23 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

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