Economics
JFK Was Last President to See Treasuries With Lower Term Premium
- Investors aren’t demanding compensation to own long-term debt
- Treasuries are alternative to negative yields around the world
The Search for High-Yield Points to U.S., Says Stealey
This article is for subscribers only.
It takes a lot to rattle Treasuries traders these days.
Not since 1962, when John F. Kennedy was president and Bob Dylan released his first album, have they demanded less compensation to own a long-term U.S. government bond rather than a series of shorter ones. In fact, they don’t demand anything at all. A Federal Reserve Bank of New York measure of the 10-year term premium, a product of the perceived riskiness of longer-dated securities, fell to negative 0.38 percentage point Tuesday. Many bond professionals view a level below zero as signaling the debt is theoretically overvalued.