Dalio: Fed will need to buy bonds as stimulus boosts yields

March 23, 2021 by No Comments

Bloomberg/3-19-2021

Graphic image of Uncle Same saying I need vast sums of money“[Dalio] said the world is ‘very overweighted in bonds,’  and they are yielding minus 1 basis point in real terms, which is ‘very bad. And not only might there be not enough demand, but it’s possible that we start to see the selling of those bonds,’ he said. ‘That situation is bearish for the dollar.’”

USAGOLD note:  Dalio is right on this. To stabilize the bond market, the Fed may have no other choice but to greatly increase its monthly quantitative easing outlay. On top of everything else, reports are beginning to surface of major market players shorting the bond market.

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Original source: https://www.usagold.com/cpmforum/2021/03/dalio-fed-will-need-to-buy-bonds-as-stimulus-boosts-yields/