From the end of 2009 to the end of 2019, the size of the United States National Debt held by the public grew from $6.8 trillion to $17.2 trillion, which meant that the supply of government bonds rose substantially over the period. During the same period, however, the 10 year US Treasury Bond yield to maturity fell from 3.59% in December 2009 to 1.86% in December of 2019. Explain how such an increase in the supply of government bonds can lead to a fall in the interest rate
From the end of 2009 to the end of 2019, the size of the United States National Debt held by the public grew from $6.8 trillion to $17.2 trillion, which meant that the supply of government bonds rose substantially over the period. During the same period, however, the 10 year US Treasury Bond yield to maturity fell from 3.59% in December 2009 to 1.86% in December of 2019. Explain how such an increase in the supply of government bonds can lead to a fall in the interest rate
Chapter1: Making Economics Decisions
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From the end of 2009 to the end of 2019, the size of the United States National Debt held by the public grew from $6.8 trillion to $17.2 trillion, which meant that the supply of government bonds rose substantially over the period. During the same period, however, the 10 year US Treasury Bond yield to maturity fell from 3.59% in December 2009 to 1.86% in December of 2019. Explain how such an increase in the supply of government bonds can lead to a fall in the interest rate
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Bonds yeilds are significantly affected by monetary policy. This policies may come from the actions of central bank, such as the Federal Reserve, a currency board or other types of regulatory comimittes.
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