I'll preface this by saying I don't understand economics beyond a couple of intro classes a long time ago. Last year there was a lot of concern that bond rates did not decrease even as stock prices went through a correction, with concerns that the tariffs stifling growth and driving costs up combined with increased deficit spending would cause countries to pull out of the dollar and would send us into a debt spiral which would cause bond rates to skyrocket. From a layperson's perspective it looks like all of those things have happened or are in the process of happening plus the Iran war chaos but bond prices haven't really moved. Why not?
Why have US bond rates remained stable over the last year?
byu/elko38 inAskEconomics
Posted by elko38
1 Comment
None of the things you have pointed to are reasons why forward rates curves move. The “true” forwards rates curve is the sum compilation of every spot rates curve between now and the end of the period. The only reason why the rates curve moves is if forward expectations of spot rates move. The only reason why spots rates move (in the US) is the Fed.
So ask yourself whether you think the Fed is going to move rates, rather than all the other things you are saying.