Monthly Update
Why do US Treasury Bonds tend to outperform US Equities during periods of negative economic growth?
US Treasury Bonds are seen as a safe-haven asset class primarily due to the fact that the issuer of the Bonds is the United States Treasury Department. This makes the bonds automatically part of the Reserve Currency as it is denominated in US Dollars and thus underwritten by the full faith and backing of the US Government. In theory the risk of default on these bonds are virtually zero as the Federal Reserve Bank can always create new money to pay off old debt.
Read more about it here in our Monthly Newsletter :
Summary – November ’23
