From the end of 2009 to the end of 2019, the size of the Federal Debt held by the public grew from $6.8 trillion to $17.2 trillion. During the same period, the 10 years US Treasury Bond yield to maturity fell from 3.59% in December 2009 to 1.86% in December of 2019. Explain how such an increase in the supply of government bonds can lead to a fall in the interest rate. Second, consider that the 10-year bond rate has fallen further in 2020 to 0.61 percent on April 16, despite a further increase in the national debt due to the decline in the economy and increase in federal government spending. Why has this continued in 2020 during an economic crisis?

Answer rating: 100% (QA)

Bonds yields are significantly suffering from monetary strategy This policy may come from the actions of the monetary institution like the Federal Reserve System a cash board or different sorts of adm... View the full answer