Thu, Sep. 03 Electoral Vote Predictor

The Bond Market Is Not Happy Actually, it is worse than that. The bond market is in turmoil, and that has political implications for November. The federal government is spending far more money than it takes in via taxes, so it has to finance billions of dollars of spending by selling treasury bills, notes, and bonds, the difference between those being the time to maturity. Treasury bills are for a year or less and don't pay interest, so they are sold at a discount and pay face value at maturity. Notes (< 20 years) and bonds (≥ 20 years) pay a fixed (coupon) interest twice a year and are auctioned off. The interest rate is fixed for the entire term. Normally, they go for roughly face value. In all cases, the government effectively tries to set the interest rate, although if it is set too low, there may not be enough buyers and the auction fails. Click here for full story