Monday, 26 August 2013

Baby Boomers to curb rise in US bond yields

US Treasury yields may have gone up recently in anticipation of the Federal Reserve tapering its bond purchases but over the longer term, this Bloomberg article says that Baby Boomers will help keep yields down.

Baby Boomers’ influence on U.S. Treasuries will help hold yields down as people born in the initial decades after World War II shift to fixed-income assets to prepare for retirement, mirroring a pattern in Japan.

The CHART OF THE DAY shows Treasury yields have gradually declined as the proportion of U.S. citizens over 65 years climbed. The age group will swell to 20 percent of the population by 2030 from 14 percent now, according to the U.S. Census Bureau. The chart tracks a similar trend in Japan, where 24 percent are over 65 years, the world’s highest ratio of seniors, up from 19 percent a decade ago.

Bloomberg's Chart of the Day

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