Questions tagged [government-bonds]
for questions that relate to government bonds. It is recommend you use a country tag or state what country you are referring to. A government bond is a bond issued by a national government, generally promising to pay a certain amount on a certain date, as well as periodic interest payments.
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What does "Yield Curve" mean?
In the financial news we often read about the Yield Curve. What exactly is it?
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Why would I buy a Bond at a Negative Interest rate?
I read that France is selling bonds at Negative Interest Rates, and more recently Germany Started in 2016. I understand why this is beneficial for France, but why in the world would I pay money to ...
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Why invest in long term government bonds when the yield curve is inverting?
The New York Times has noted that the US is heading toward an inverted yield curve, which is one of the precursors for a recession. The yield curve is said to be inverted when long term government ...
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Bought agency bond (FANNIE MAE 0% 04/08/2027), now what?
I just bought 15 of these for $10,677 through my brokerage firm. It says 3.3% interest. I have no idea how this works. But I trust it is gov bond and will pay 3.3%.
Can anyone explain how it works? ...
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Why would anyone buy a government bond?
In my country, the interest rates on government bonds are currently 2 - 3%, but I have money in a term deposit at the bank which earns 4% interest. I don't understand how this can be possible. Why are ...
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How do you short US Treasuries?
As the US government continues to issue record levels of debt, I don't think it can continue to sell that debt at 2 - 3% interest. It will face the simple supply/demand law of economics — the more ...
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How Is There A Yield Curve For Treasuries?
Why would anyone buy a 1 yr T-Bill with a return of 1.25% when you get double that on a 30-year T-Bond? Where is the risk and/or liquidity premium coming from?
There's a highly liquid, secondary ...
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Did Greece really issue bonds to investors yielding 42% interest?
I read this in the news regarding Greece's financial crisis:
The country’s 10-year bond yield fell 11 basis points to 8.04 percent
at 12:26 p.m. in Athens today. While that’s down from a record ...
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Is my back-of-the-envelope calculation about taking out a loan to invest into the markets flawed?
With the recent economic struggles due to the Covid-19 pandemic the stock market seems to be even more interesting for personal investments. Taking out a loan might be one of the ways to gather or ...
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For an investor, what's the appropriate response to the U.S. Debt downgrade?
So the S&P has downgraded United States debt from it's AAA status. There have been other threads discussing why/when a downgrade will happen, as well as possibility of default. Instead, I want to ...
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What is the rationale behind stock markets retreating due to S&P having a negative outlook on the USA?
From a Bloomberg article published on 18/4/2011
Standard & Poor’s put a “negative” outlook on the AAA credit rating of the U.S., citing a “material risk” the nation’s leaders will fail to deal ...
user2654
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Why does the yield on SHY (US treasury bond ETF) seem so bad?
With the US interest rate increasing so much lately, I am interested in putting some more of my money into US treasury bonds. I am looking at the SHY ETF on Fidelity, which is an ETF comprising short-...
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Do bonds become more valuable right before a coupon payment?
I'm learning about fixed income for the first time and my understanding is that the value of a bond depends on three major variables:
The face value
The time to maturity
The coupon rate a.k.a. the ...
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Why did one-year notes pay more than 10-year notes during the 1980's crisis?
Why did one-year notes pay more than 10-year notes during the 1980's crisis? During the early 1980's, one-year T notes paid more than the 10-year T note, which implies that nobody wanted to buy the ...
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Can an American birth certificate be redeemed for money?
Can an American birth certificate be redeemed for money? Why is it printed on bond paper?
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What’s the difference between inflation and inflation tax?
I get that people seem to be using the term inflation tax as a metaphor for understanding inflation, but it seems to be a bit more than that. We all know that inflation reduces the buying power of our ...
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Are treasury bonds more liquid than USD? [closed]
Does it make sense to say that, in a way, US Treasury bonds are more liquid than USD? I think this because the value of all the bonds in circulation is way greater than all the dollars in circulation, ...
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How do UK Gilts interest rates and repayments work?
I'm looking at UK Gilts and trying to understand how the interest rates and repayments really work. As I understand, if I buy £100 of a "5% Treasury Gilt 2020" it means I will get 5% interest each ...
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Can I convert interest income to capital gains by selling t-bills before maturity?
I've been buying 6-month treasury bills. The interest is taxed at maturity as interest income. If however it could be taxed as short-term capital gains, I could avoid paying any taxes on it because I ...
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How much in inflation protected securities (TIPS) should I buy?
I'm wondering whether it's worthwhile to allocate some of my bond portfolio in the Vanguard TIPS fund. I plan to work until about 2040, and I prefer (efficient) risk over return. I plan to buy and ...
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Is the US market really expecting less than 3% yearly inflation over the next 5 years?
Several people in my family are fearful of upcoming high inflation, perhaps due to the relatively high US inflation figures reported in the last few months (8%+). They think that the US inflation rate ...
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How does the Pension system work in Poland?
I've been reading articles I found in chat about the Polish pension system and how it is changing. (Chat room: http://chat.stackexchange.com/rooms/22/show-me-the-money)
I'm trying to understand how ...
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What do single quotation marks in the price of futures mean?
What are those single quotation marks in the price, and how to read them?
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Is there a catch in investing in treasuries close to maturity date?
Is there a catch to invest to treasuries close to maturity date?
I don't want to lock the money for a long time, b/c the interest rate probably will go up. But I am concern that it's not that simple.
...
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Can I contribute my existing Treasury Bills into a Roth IRA?
Let's say I have paper 30yr treasury bills sitting in a safe that don't mature for 9 years. Can I place those bills into a Roth IRA? If so, are they valued against my contribution limit at face ...
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Is it common for ratings agencies to disagree on sovereign debt ratings?
I heard today that Moody's and Fitch and left the US sovereign debt rating at AAA/Aaa, despite the downgrade from S&P to AA+. Is it common for ratings agencies to disagree on a rating? If so, is ...
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How does the 10 year U.S. Treasury bond work?
Can someone explain to me how these bonds work?
Are they released to the public at a certain price (face value) and interest rate, and the face value is what traded on in the market place, resulting ...
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Can someone explain how government bonds work?
Can someone explain, for irresponsible investors, the maths behind government bonds as presented here?
I am assuming that the "coupon" is the yearly interest paid on the original price. Since this is ...
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10-year real Treasury bond yield: How can it be zero, or negative?
How can the 10-year real Treasury bond yield be zero, or negative?
That's like giving out money for free, right? Does that mean that people expect the value of the dollar to go up (deflation)?
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Why government bonds fluctuate so much, even though interest rates don't change that often?
Why do government bond prices fluctuate on a daily basis on the bond market?
I can understand the fluctuation of corporate bonds because they are tied to the credit worthiness of the company and ...
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How does a 2 year treasury note work?
The current prices of a 2 year seem to be near the 52 week low.
Is that good?
Let's say I had $1,000 to spend and I put it all in 2 year treasury notes.
Could I sell them in a year like stocks (if ...
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Which yield curve is inverting?
All over the news I read that the yield curve is inverting.
I thought they were talking about the US Treasury Bond yield curve.
This seems to be the case when I read this article.
However there are ...
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Who sets the prices on government bonds?
I noticed my country Greece wanted to sell bonds last year and they were stating "If they go above 7% we won't sell.". But who sets the price if not them? Why can't they say "the price is 5% and if ...
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How to read bond yield quotes? What do the time, coupon, price, yield, and time mean?
I am newbie in finance and I recently saw Bloomberg bond yields quoted as follows:
Can anyone specify what "1 month" and "1 year" mean? What do coupon, price, yield and time (EDT) mean?
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Would the effects of an anticipated default by a nation be mostly symbolic?
Given that the whole Greece saga has played out for a few years now -- and that most speculation is that Greece will default at some point -- if they finally do default, will it be mostly symbolic?
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What's the real yield on this bond?
I've never bought bonds before and I'm looking into US Treasuries. The 3mo treasury below is described as having a ~4.9% yield. How is this number derived?
To me, it looks like if I buy this note with ...
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Which particular 10-year note does the daily 10-year treasury note yield refer to?
Question might be a bit obscure. The yield of the 10-year treasury note is reported daily on TV and in the papers. Since there are notes with different maturities in circulation, also more importantly,...
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Where do I-Bonds fit into personal finance plans?
I'm mainly interested in a finding a medium-term, low risk savings vessel. Bank and Credit Union savings accounts available to me at the moment are all < 1% APY, so inflation-protected securities ...
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What effect would a lower U.S. government credit rating have on TIPS?
TIPS = Treasury Inflation Protected Securities.
Inflation could come quickly if the U.S. starts printing money to pay debt. I'm thinking about investing in these to protect my portfolio.
How does ...
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How does a rollover work with Bonds?
I understand how a rollover works with personal loans. An easy example would be a car. Someone wants to buy a new car, but they still have an outstanding balance on their current vehicle. So the ...
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How could USA defaulting on its public debt influence the stock/bond market?
Ok, let's face it... US public debt is high and people are starting to wonder if the country might default on its debts. How would this hit United States' stock market, its bonds, or its currency? ...
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Why would one buy a bond with negative rate? [duplicate]
I see presently that many countries outside the U.S. have negative rate government bonds. So you buy one for $101 and in 5 years you get $100 back (face value). (I picked numbers for simplicity).
I ...
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Is it feasible for a small retail UK resident to buy UK inflation-linked GILTs directly from the issuer?
I'm interested in buying individual inflation-linked GILTs directly in the primary market (directly from the UK Debt Management Office).
To give some context, I want to do this as I understand the ...
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Are AAA private-sector corporate bonds safer than government bonds?
Conventional wisdom says that government bonds are the safest investment there is. But the Indian government is rated only one level above junk. Aren't AAA-rated bonds of Indian companies safer? Haven'...
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How does S&P schedule reviews of sovereign credit ratings?
It's not too hard to find current sovereign credit ratings, but I need more info. I believe that the major ratings agencies schedule reviews of different countries (or banks, etc.) so what I'd like ...
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Does it make any sense for UK private investors to hold gilts directly and outside of a tax wrapper?
According to my understanding of gilts (which is in accordance with the answers here), private investors in UK gilts paying a premium on the redemption price (for example 2% T20s currently report a ...
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Pros & cons of Floating Rate Notes (FRNs) offered on TreasuryDirect, vs. Treasury Bills?
I'm specifically looking to make short term investments in Treasury Bills or Floating Rate Notes (FRNs), which are new securities that began to be offered in January 2014.
How do each of these ...
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Tangible alternative to paper U.S. savings bonds?
When I was little, it was fairly common to get US Savings Bonds from relatives. It introduced me to savings, financial instruments, and the idea of delayed gratification. I know there are 529 plans, a ...
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Understanding bond ETFs
I am failing to understand the bond ETFs.
I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
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Basic understanding of bonds, values, rates and yields
I'm looking for a very simplistic (ELI5) explanation of how bonds work, but I'm not sure I have the basics correct.
As I understand it, a bond is basically a IOU or loan. Any company, government or ...
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