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Article: The Demise of the 30-Year Treasury Bond as a Benchmark or Pricing Fixe -- Income Securities.(Statistical Data Included)
- Article from:
- Business Economics
- Article date:
- October 1, 2000
- Author:
CopyrightCOPYRIGHT 2000 The National Association for Business Economists. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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THERE ARE SOME GOOD ALTERNATIVES.
With all the drama and finality that the prestigious Wall Street Journal could muster, it declared this past May 3 that the reign of the 30-year Treasury bond as the benchmark for pricing fixed-income securities in the $14.7 trillion U.S. bond market had ended. Without missing a beat the Wall Street Journal shifted the "benchmark" crown to the brow of the 10-year Treasury note, already the basis for the rate that is charged on most home mortgages. This article will examine the reasons for the demise of the 30-year Treasury bond as the U.S. bond market benchmark and consider possible substitutes to be used as the new benchmarks ...