Economics
Bond Market Lessons From Australia’s Test of Yield Curve Control
- Returns for investors have vanished since RBA adopted YCC
- New Zealand opted for QE and its bonds have outperformed
A pedestrian wearing a face mask walks past the Reserve Bank of Australia in Sydney.
Photographer: David Gray/BloombergThis article is for subscribers only.
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.
But there have been very different outcomes for bond holders after policy makers in Sydney chose to focus on yield curve control while their counterparts in Wellington stuck with more familiar quantitative easing.