ETF Prospects Improving (And Not Just for Bitcoin)
Yield Curve Steepens
Over the past week, a flurry of news has led to a significant steepening in the yield curve. The key events:
- Last Friday, the Bank of Japan (BOJ) signaled a more lenient approach to their Yield Curve Control (YCC) policy. While their target 10-year rate remains at 50 basis points (bps), they are now willing to let it drift as high as 1%. This announcement sparked fears that it could trigger a wholesale 50 bps increase in global 10-year rates. Additionally, the BOJ's decision means there will be more supply of Japanese Government Bonds (JGBs) in the market, as they are reducing the amount of debt they will purchase. This might have second-order effects on the demand for US Treasuries (USTs).
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