Loading ...I’m no Bond pro, but they say the Bond purchasing prices or values of the Bonds go up if the later issued bonds have a lower interest rate. Opposite if rates go up. Your older bond with a lower rate, has to be sold at a loss. Who wants to buy a lower interest Bond? Unless you get a discount on that Bond.
So if the Fed bought bonds at higher rates, the Bonds gained value as rates dropped. So when they bought the Bonds, and drove rates lower, they drove their profits or Bond values higher on the previously bought higher interest Bonds. So to me it looks like a no brainer fraudulent short play (inside information) as they bought bonds that gained value as rates dropped.
So they are cashing out profits?? And Bond guys out there? What do you think? I’ve never seen any news on this. Re Fed profits and losses on bonds. When they raised rates to 21% in the ’70s they must have been SELLING new Bonds that paid higher rates. And those Bonds LOST value as they raised the rates. Literally losing money every time they sold bonds. Who wants to buy an older lower rate bond when the new bonds have higher rates?