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Bond Returns Have Vanished in Australia With Yield Curve Control
As the coronavirus pandemic brought economic growth to an abrupt halt this year, the central banks of Australia and New Zealand responded quickly and decisively with aggressive bond-buying programs. The Reserve Bank of Australia adopted yield curve control, while its counterpart in New Zealand undertook quantitative easing — that divergence has led to different outcomes for bond holders, offering a salutary insight into the two policies. In Australia, which geared its purchases to controlling the three-year yield, bonds have lost 0.2% this quarter, making them the third-worst in developed markets, according to data ... (full story)