At $2 Million Per Minute, Treasuries Mint Cash Like Never Before.

US Treasuries are returning to their traditional role as a source of income for investors, after years of being held hostage by zero-rate policies. Last year, investors earned nearly $900 billion in annual interest from US government debt, double the average of the previous decade. With over 90% of Treasuries carrying coupons of 4% or more, investors are better shielded against any jump in yields. The newfound income from Treasuries may be playing a role in supporting the economy, as it creates a material wealth effect among Americans. Money-market funds and bond funds have seen increased investments, and the amount of debt held by households and non-profits has surged to a record $5.7 trillion. The reset in yields for high-quality debt will have broad implications for various investment firms. Bonds are now considered a "tremendous value" compared to stocks, and there are solid reasons to believe that yields won't revert back to their post-financial-crisis levels even after the Federal Reserve starts cutting rates. Factors such as inflation worries and the massive US deficit are likely to keep yields elevated and maintain demand for fixed income. [Extracted from the article]