U.S. bond yield rises sharply, market volatility increases--> March 4, 2021

Since August last year, the long term interest rate of U.S. Treasury Bond had bottomed out with accelerated rise since the beginning of the year. The maturity spread has widened substantially.

After the outbreak, under the impact of the deteriorating economic environment and the Federal Reserve quantitative measure, the long-term interest rate of U.S. Treasuries fell sharply until it bottomed out to 0.52% in August 2020, and then entered an upward trend.

By February this year, interest rates jumped from a maximum of 43BP from 1.1% to 1.54%, which was close to the level before the outbreak. At the same time, the short-term yield of U.S. Treasury remains at a low level  around 0.15%. The maturity spread widen by up to max. 138BP (two-year vs. ten-year U.S. Treasury Treasury Bond  ) , as driven by long-term yield rates, is breaking the 2016 record.

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