The Unappealing Yield of US Treasuries for Foreign Buyers & US Dollar Strength

With the European Central Bank dragging its feet to begin the monetary tightening cycle, the difference between US and German rates has opened up to record levels. In the chart below, I show the yield on 10 Year US Treasury Bonds and 10 Year German Bunds.

After starting from a negative spread in 2008, there is now a positive spread between 10 year US Treasuries and German Bunds of over 2.4%.