link and logic of bonds
1 BASIC:
graph LR
PriceUP[Price Up]
PriceDown[Price Down]
YieldDown([Yield Down])
YieldUp([Yield Up])
people--Buy-->PriceUP-->YieldDown;
people--Sell-->PriceDown-->YieldUp;
2 Inflation:
graph LR
PriceUP[Price Up]
YieldDown([Yield Down])
HighInflation--RaisesFederalFundsRate-->
HigherInterestRates[Higher Interest Rates] -- bondsMoreAttractive -->
DemandForBondsIncreases -->
PriceUP[Price Up] -->
YieldDown([Yield Down])
EconomicCrisis--LowerFederalFundsRate-->
LowerInterestRates[Lower Interest Rates] -- bondsLessAttractive -->
DemandForBondsDecrease[Demand For Bonds Decrease] -->
PriceDown[Price Down] -->
YieldUP([Yield Up])
3 Affect Inflation:
graph LR
HighPMI-->HotEconomic-->
HighInflation--RaisesFederalFundsRate-->
HigherInterestRates[Higher Interest Rates] -- bondsMoreAttractive -->
DemandForBondsIncreases -->
PriceUP[Price Up] -->
YieldDown([Yield Down])
HighCPI-->HotEconomic
HighPPI-->HotEconomic
LowPMI-->ColdEconomic-->EconomicCrisis--LowerFederalFundsRate-->
LowerInterestRates[Lower Interest Rates] -- bondsLessAttractive -->
DemandForBondsDecrease[Demand For Bonds Decrease] -->
PriceDown[Price Down] -->
YieldUP([Yield Up])
LowCPI-->ColdEconomic
my questions
- how short term treasury Notes impact long term bonds?