The excess of US imports over exports continued to provide dollars to the rest of the world, which were invested in the US bond market. The graph shows that foreign investments flowed into the market for US fixed income securities in Q1 2006, at a rate 25% greater than in 2005. (See Table F107, […]

Despite worries about rising interest rates engineered by the Federal Reserve Bank, demand for corporate and foreign bonds in the US market continued firm through Q1 2006. Even with firm demand, corporate bond prices weakened in Q1 2006 because a significant increases in new offerings by corporations seeking to finance stock buybacks. The graph shows the principal […]

Massive issuance of bonds by non-financial corporations, largely to finance an extraordinary level of stock buybacks, helped force bond interest rates upwards in Q1 2006. (See Flow Table F212). The annualized rate of bond issuance by non-financial corporate business rose to $240.4 billion in Q1 2006, four times the issuance rate of 2005. The graph shows […]