Not much worries US bond traders as term premium falls

New York

IT TAKES a lot to rattle Treasuries traders these days.

Not since 1962, when John F Kennedy was president and Bob Dylan released his first album, have they demanded less compensation to own a long-term US government bond rather than a shorter one. In fact, they don't demand anything at all. A Federal Reserve Bank of New York measure of the 10-year term premium, a product of the perceived riskiness of longer-dated securities, fell to negative 0.38 percentage point on Tuesday. Many bond professionals view a level below zero as signalling the debt is theoretically overvalued.