1988-1989 interest rate increase cycle. Background of interest rate hike: rising inflation; The benchmark interest rate was raised from 6.5% to 9.8 125%.
1994-1995 interest rate increase cycle. Background of interest rate hike: inflation panic; The benchmark interest rate was raised from 3.25% to 6%.
1999 -2000 interest rate increase cycle. Background of interest rate hike: Internet bubble; The benchmark interest rate was raised from 4.75% to 6.5%.
2004 -2006 interest rate increase cycle. Background of interest rate hike: real estate bubble; The benchmark interest rate was raised from 1% to 5.25%.
The correlation between the first three rounds of interest rate hikes and the yield of US Treasury bonds shows the following remarkable characteristics:
With the deepening of each round of interest rate hike, the yield of government bonds keeps rising.
The yield of government bonds often falls ahead of time before the end of the interest rate hike cycle, and the advance time is within 1 quarter. The rise of the federal funds rate and the yield of government bonds at the same time shows that the yield of government bonds has a very obvious and direct response to the Fed's interest rate hike. The rising cycle of national debt yield ended ahead of schedule, reflecting that the market's expectation of the end of the interest rate hike cycle was released with the passage of time.
Since June 2004, the yield of U.S. Treasury bonds has not risen sharply with the increase of current interest rates, but has declined. During the period of interest rate increase from June 2004 to June 2006, the yield of government bonds has been at a low level. This is the so-called "interest rate mystery".
Observing other major economies in the world in the same period, we will find that this phenomenon not only happened in the United States, but also the long-term interest rate in the whole world market has a downward trend to varying degrees.
First of all, the monetary authorities in China, Japan and other countries bought a lot of US dollar bonds, which lowered the interest rate of long-term US bonds.
Second, emerging economies, such as China and India, have gradually integrated into the world trading system in recent years, expanding the global market of goods, services and finance, which helps all economies maintain an ideal inflation rate, while reducing the risk premium related to inflation, resulting in a sharp drop in long-term interest rates. ?