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How the Bond Market Is the Backbone of the Economy?

The bond market can help predict the economyBonds are powerful and have a robust effect on the economy. Such a huge effect means you can use bonds to forecast how the economy will look like in the future. Bond yields show you the direction investors believe the economy will take. <br><br><br>Yields on long-term notes are usually higher, for example. That shows investors want more ROI since theyu2019re tying up their money for longer periods. The yield curve thus slopes up when you look at it from left to right.

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How the Bond Market Is the Backbone of the Economy?

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  1. J THE TRADER menu Back to Blog How the Bond Market Is the Backbone of the Economy 11/29/2020 POWERED BY

  2. J THE TRADER menu The bond market can help predict the economyBonds are powerful and have a robust effect on the economy. Such a huge effect means you can use bonds to forecast how the economy will look like in the future. Bond yields show you the direction investors believe the economy will take.  Yields on long-term notes are usually higher, for example. That shows investors want more ROI since they’re tying up their money for longer periods. The yield curve thus slopes up when you look at it from left to right. When there’s an inverted yield curve, it shows the economy is almost going into recession. This is when short-duration yields on Treasury bills, like one month to one-year notes, go higher than yields on longer-term ones such as 10-30-year bonds. This shows you one thing: Short-term investors want higher interest rates and more ROI than their long-term counterparts. Why? They believe that a recession is going to happen soon. Therefore, you can tell so much about the economy by just checking out the bond market. It’s the backbone of the economy with tentacles that stretch wide on the economic divide.  You can bene?t from this huge marketThe best news is that you can start bond trading even as a complete beginner with zero experience. You just need the right knowledge. Check out our Bond Market Mastery Course and start pro?ting from this amazing market. POWERED BY

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