Remember, when Trump was elected, and we witnessed a sudden and
rapid change in the interest rates. The rates increased in a short period
of six days, promising fast growth in the U.S. economy.
We got to witness another rapid change in the interest rates, but this
time it is the complete opposite. The interest rates have been as low as
ever in history. The U.S., 10-year yield, fell from 2.07 % to 1.59 % in a
matter of 7 days after the Federal Reserve cut down its interest rates.
It would be wrong to entirely blame the Trump trading policies for the
decline in the interest rates, but we can safely say that it forms a
considerable part of the reason. Germany's ten-year bund has not been
able to stay unaffected, and it has reached 0.6 % in negative.
Earlier, the 30-year bond yield progressed by a remarkable number
uplifting the economy in 2016, i.e., when Trump was elected. Similar
actions have been noticed but in the other direction. The 30-year yield
has witnessed an abrupt low by 41 points.
The drop in the interest rates began last week, and the situations
declined due to the trade war between the U.S. and China. The fight
started due to Trump's announcement of adding on new tariffs to
additional Chinese goods, which led to a halt in the exports. The
Chinese currency, yuan had faced an extreme decrease after the events
of 2008. It is very uncertain whether the States or China would begin to
negotiate to reach a peaceful and mutual agreement to stop hindering
the market.
The bond market is quite unstable at the moment, and all the clients
are worried about the decreasing interest rates. The low yields are
leading to the creation of tension about the global recession, although
it is not entirely sure.
