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15 March, 20:31

Is it reasonable to assume that treasury bonds will provide higher returns in recessions than in booms?

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  1. 15 March, 22:35
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    Yes because a treasury bond is backed by the government
  2. 15 March, 23:16
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    It is indeed reasonable. We know this because interest rates rise when the economy is booming and fall when the economy goes into a recession which is known as procyclic movement. What happens is that during recessions the government usually tries to keepcinterest rates low in order to stimulate investment. It is good because bond prices and interest rates go in opposite directions so bond prices will rise when recession starts.
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