DoubleLine Product Specialists Sam Nussbaum and Corey Clermont discuss fundamental and technical factors affecting both the short-end and long-end of the U.S. Treasury market. As Treasury yields fell after the start of the second quarter of 2021, investors looked to put the rally into the context of growth and inflation prospects for the economy. Topics include: increased usage of the Fed’s Overnight Reverse Repo Facility, decreasing Treasury issuance, and increasing sources of demand for Treasuries.”
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The second half of 2021 began with a continuation of the strong second quarter rally in the U.S. Treasury market. This performance stands in stark contrast to the first quarter when the yield on the 10-year note rose 83 basis points (bps) as the Treasury market priced in a strong rebound in U.S. economic growth and the prospect of higher inflation.