According to a research report by Société Générale, Paris, it could be well the case that the yields for US Treasuries could reach a level of 5% or more. For the time being though, this won’t be possible as the Fed continues to nimbly purchase bonds, as shown in the table below.
| Date | Fed balance of US Treasuries |
| 31.12.2012 | USD 1‘656 bil |
| 31.05.2013 | USD 2’011 bil |
| Fed purchases | USD 355 bil |
The rumours buzzing around are that the Fed will eventually reduce the size of its current USD 85 bil asset purchase program, which may result in interest rates moving and the stock market taking a hit.
But what if, due to inflationary pressure, the Fed were to exit completely from the asset purchase program? And furthermore, it deliberately failed to elucidate the situation? What bout if the Fed start selling bonds.
So what is the new trade correlation? In past years it has been strong USD and strong treasury market, but recently we have seen the opposite, weak USD and weak treasury market.
| Datum | FED-Bestand an US-Treasuries |
| 31.12.2012 | USD 1,656 Mrd. |
| 31.05.2013 | USD 2,011 Mrd. |
| FED-Käufe | USD 355 Mrd.
|
| Datum | FED-Bestand an US-Treasuries |
| 31.12.2012 | USD 1,656 Mrd. |
| 31.05.2013 | USD 2,011 Mrd. |
| FED-Käufe | USD 355 Mrd. |