Term Premium

10 בינו׳ 2022

Term Premium is the premium bond investors pay for longer dated bonds instead of rolling shorter dated maturities. Currently we are at minus 0.9 percent. Imagine what would happen if we would go back to March 2021 levels (about 0.6%), while inflation expectations stay elevated. If "growth" acts up now, imaging what would happen in such a scenario. Food for thought.