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Tax-Cut Deal Results in Turmoil for Bonds

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Tax-Cut Deal Results in Turmoil for Bonds By Mark Gongloff and Tom Lauricella Wall Street Journal
“The tax deal in Washington led investors to dump government bonds on Tuesday, with yields on Treasurys hitting their highest level in six months… “The tax compromise will keep the economy on track, but there’s the question of how we’re going to pay for this,” said George Goncalves, head of U.S. rates strategy at Nomura Securities International, who has been bearish on Treasurys since mid-October. “It will require more Treasury borrowing.”… One fear among bond investors is that foreign central banks may also be backing away from Treasurys. William O’Donnell, head of U.S. Treasury strategy at RBS, said that foreign central banks have abruptly pared down the amount of Treasurys they are parking with the Fed for safe keeping in recent weeks.”

 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.