It is interesting to note that the yield on the US 10-year Treasury is about 2.75% versus the yield on the German 2-year yield being about 4.2%. The gap is a bit larger when compared to those for other European countries.
Germany’s 2-year yield is about 8.4 percent higher, compared to the US 2-year yield at 4.2 percent. So Germany is definitely the country that yields the most after the Federal Reserve has raised its benchmark rate. This is the case for the whole of Europe though. The two-year yield on Germany is currently about 8.3 percent higher than on the US. To put that into perspective, that’s the same as saying that the US yield is about 20.
We would argue that the two-year yield is the highest in Europe for the last six months, and the US is the highest. The US yields were up 1.5 percentage points in the summer and are up 2.5 percentage points in the winter and are up 3.3 percentage points in the summer. So the US yields are down by about 3 percentage points in the summer and by about 5 percentage points in the winter.
I don’t know what kind of games you’re playing on the web, but I can get a fair grip on the world. For now we can just stay passive, we can go to the store or just go to the game, but if we can’t handle the pressure, we’ll get killed. And unless we’re able to find a way to get back into it, we won’t get killed.
The dividend yield is the yield of the U.S. government bond market. The Fed is borrowing at much below the market rate so it is easy to see why the yield is low. The yield is inversely related to the Fed’s policy rate, or “target rate.” The lower the Fed’s target rate, the higher the yield. As long as the Fed is buying bonds, the yield will remain low. If the Fed is selling bonds, the yield will rise.
However, I find myself wondering how high the yield might go if interest rates did not exist. If the yield will remain at zero, then the entire bond market would go to hell. The value of the U.S. dollar would collapse, but it would not be the end of the world. It would just make the yield rise.
I have to admit, I was surprised to learn that I could get a dividend yield of 0.5% if I bought a 10-year U.S. Treasury bond in September. I guess I was more surprised to learn that my yield was so low.
If I had to guess, my next question will be, “What did you think the dividend yield would be?” Then I will proceed to make sure I am prepared to buy a bond with a higher yield.
The last time the U.S. dollar was at its pre-crisis price level, we would be buying about $10 billion of Treasuries a year. The Treasury’s yield on the 10-year Treasury would be about 2.87%. The yield on the 30-year Treasury would be about 4.13%. The yield on the 10-year Treasury would be about 1.65%.
The yield on the 10-year Treasury, which is the only U.S. Treasury that is not backed by the full faith and credit of the United States, is currently 1.63%. That’s in line with the rate needed to pay dividends. So, assuming we won’t default on our debt, the 10-year yield on our debt would be 3.87%, which is a big jump from the current yield of 1.65%.
