Rising rates will be sobering for Treasury market Three years ago, investors received a brutal lesson in why it is a bad idea for banks or other financial institutions to fund long-term holdings with short-term debt. Could it now be time for investors to re-learn that concept in relation to sovereign debt?
That is a question currently hovering over America’s $14,000bn Treasuries market, as the political fight about US fiscal policy intensifies. In recent months, the atmosphere in the Treasuries market has been eerily calm; so much so that this week ten-year yields dropped to their lowest level this year.
http://link.ft.com/r/OZMCDD/9ZVLYB/UUPHQX/V1RGXJ/C52BFV/ZH/h?a1=2011&a2=5&a3=19
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