It could be that 1% is relatively exceptional, a huge interest rate differential to other sovereign debt, and a catalyst for a continued bull market int DXY and treasuries and equities as capital flows to the US from devaluing, NIRP countries. I wonder if now or in the near future some may consider the long term US bond yields to be dislocated from future US growth and inflation expectations. Hot money chasing US treasuries. WTF?
It's not hot money. You are forgetting possibly that treasuries can be collateralized at 95%. I can buy treasuries and borrow against them to buy real estate which as a trade in the last 4 years has been the trade of a lifetime. Hot money? How about correct money.
Certainly a great point and hence the need to alleviate the need for more collateral with more government debt. This is needed by CBs as well for their operations. Not enough is out there as evidenced by negative maturities way out there and CBs looking for private debt as well. Goddamn, this is a vicious loop a part of which(currencies) is the reported race to the bottom.
The hot money reference is to capital outflows from the usual beneficiaries of hot money into treasuries. smart money indeed today.