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“Held to maturity” bonds are about to be a big problem
Here's the crux of the problem.
Banks have deposits and they need to do something with them. They can lend them out and often do, but you can't lend it all out.
What was seen as something safe to do with the rest was to invest it in the safest investments in the world: US Treasuries.
The problem is that those investments weren't so safe. As the Federal Reserve rapidly hiked rates the 1.6% yielding 10-year notes are suddenly paying 4%. That means the prices of those bond have... Read More
Posted: Mar 10 2023, 19:29
Author Name: forexlive
Views: 111416
