What causes treasury yields to invert?

Question

Or asked another way; why is demand greater for long duration bonds vs. short?

In: 0

Answer 1

Demand for long duration bonds is typically greater than for short duration bonds because they offer a higher yield. Long duration bonds are typically riskier than short duration bonds, so investors are willing to accept a higher yield in exchange for the additional risk. Additionally, long duration bonds tend to be less sensitive to changes in interest rates, so they can be a good option for investors looking for stability in their portfolio.