When investors over of the financial markets, the first thing that likely comes to mind is the stock market.
But there is a bigger, less-flashy counterpart to the fairness market: the bond market. At the heart of the fixed income space lies U.S. Treasurys, one of the safest investments in the world.
“We obtain not paid attention to the Treasury market because it was a market for foreigners or for the Fed,” said Priya Misra, fixed income portfolio administrator at J.P. Morgan Asset Management. “Now it’s a market for all of us, and it’s giving you better yield. So it’s something which we should not ignore.”
Buyers of U.S. Banks have been changing, with major players including China, Japan and the Federal Reserve seeing their personal holdings decline in recent years. The shift could have broad implications for the U.S. economy.
“What we’re observing is that [the new purchasers] are a lot more price sensitive,” said Anders Persson, global fixed income chief investment officer at Nuveen. “They’re due not quite as sticky.”
Watch the video above to find out more about why major buyers are fleeing the U.S. Treasury Stock Exchange, the impact on yields and the economy at large, and how investors can best navigate the market going forward.