Respecting the Pump
Nov 2, 2023
• 6
Min Read
Treasury Refunding and Its Impact on Asset Prices
The bond market has been experiencing notable volatility, predominantly due to a phenomenon known as a bear steepening. This situation arises when short-term interest rates remain stable, but long-term rates rise precipitously. We attribute this volatility largely to an increase in the supply of long-duration assets, propelled by a growing budget deficit and the expectation of ongoing Treasury issuances.
While this bond market downturn has posed challenges for a variety of risk assets, crypto and gold have distinguished themselves by res...