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Daily inflation-indexed bonds (also known as inflation-linked bonds or colloquially as linkers) are bonds where the principal is indexed to inflation or deflation on a daily basis. They are thus designed to hedge the inflation risk of a bond. [1] The first known inflation-indexed bond was issued by the Massachusetts Bay Company in 1780. [2]
Inflation has been a feature of history during the entire period when money has been used as a means of payment. One of the earliest documented inflations occurred in Alexander the Great's empire 330 BCE. [26] Historically, when commodity money was used, periods of inflation and deflation would alternate depending on the condition of the ...
In June 2012, the Spanish 10-year government bond reached 7%, 5.44% over the German 10-year bond. [71] As Spanish credit default swaps (CDS) hit a record high of 633 basis points and the 10-year bond yield at 7.5% (23 July 2012), Spain's economic minister traveled to Germany to request that the ECB facilitate government bond purchases to "avoid ...
A bond vigilante is a bond market investor who protests against monetary or fiscal policies considered inflationary by selling bonds, thus increasing yields. [1] In the bond market, prices move inversely to yields. When investors perceive that inflation risk or credit risk is rising they demand higher yields to compensate for the added risk. [2]
Bond yields have soared. LONDON/TOKYO (Reuters) -World stocks dropped for a second successive day on Wednesday, jolted by another push higher in U.S. Treasury yields ahead of inflation data that ...
The bond market veteran said the economy was running too hot for further rate cuts. ... "We're growing at 3.2% this quarter, just grew at 3%. Inflation dropped into the mid-2s, and is now turning ...
In the case of contracts stated in terms of the nominal interest rate, the real interest rate is known only at the end of the period of the loan, based on the realized inflation rate; this is called the ex-post real interest rate. Since the introduction of inflation-indexed bonds, ex-ante real interest rates have become observable. [2]
The soundest gauges of the bond market's long-term inflation view plunged last week to their lowest in almost two years, suggesting investors think the Fed will get inflation back near its target ...