The Federal Reserve is ready to move on targeting the yield of treasury bonds – this was the conclusion made by market participants by analyzing the actions of the regulator. A similar policy has long been adhered to by the Bank of Japan, as well as the Central Bank of Australia since March. In other words, central banks, which have already reduced rates to zero, are beginning to conduct selective purchases of government bonds in order to keep the yield curve at certain levels, while giving a signal to the market that rates will remain low. Currently, the Fed is considering various tools to support the economy and the financial market in a way out of the crisis. Traders are sure that this is the path the American regulator will choose. If the Fed decides to take this step, bond purchases will not be carried out according to a previously announced schedule, but only when the central bank considers it necessary, and to the extent necessary to maintain the yield in a given range.
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