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Can you please explain in detail with the help of the graph and please do not...


Can you please explain in detail with the help of the graph and please do not copy from other tutors

Treasury bond yields (interest rates) have plummeted. Explain why and illustrate
graphically with a bond market graph.
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Answer #1

The treasury bond interest rates are related inversely to bond prices.

Due to the sudden outburst of COVID-19 in the US along with the price wars in the oil cartel, the confidence of investors in the economy went for a toss.

As a result, they started putting their money in buying safe treasury bonds, thereby increasing its demand and shifting the demand curve to the right.

As it can be seen, bond prices increase in response to increased demand for bonds.

This results in falling interest rates or bond yields.

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