/biz/ - Business & Finance

>>22331918

>>22325266
When the yield drops the price of the bond rises. Its a swing trade. Of course you won't hold it for the yield. Banks and dealers holding bonds now want YCC because that means the Fed will buy them all at any price.

>>22325141
The common sense is that if you see YCC coming, you know the Fed will be buying bonds. If you hold bonds you can sell them to the Fed at a premium. Banks did this is 2008 and are doing it again now.

>>22326017
Smoothest brain right here. The definition of Yield is the coupon payment (a fixed rate) divided by the bond price. The bond price is the bid given at bond auctions. When the Fed does YCC or QE it creates artificial demand for the bonds, raising the bid.