We introduce safe asset demand for dollar-denominated bonds into a tractable incomplete-market model of exchange rates …. The convenience yield on dollar bonds enters as a stochastic wedge in the Euler equations for exchange rate determination … identifies a novel safe-asset-demand channel by which the Fed's QE impacts the dollar and long-term U.S. Treasury bond yields …

bond yields. The result holds even when controlling for the default risk on corporate bonds. We argue that the corporate …We show that the US Debt/GDP ratio is negatively correlated with the spread between corporate bond yields and Treasury … bond spread reflects a convenience yield that investors attribute to Treasury debt. Changes in the supply of Treasury debt …

bond yields. The result holds even when controlling for the default risk on corporate bonds. We argue that the corporate …We show that the US Debt/GDP ratio is negatively correlated with the spread between corporate bond yields and Treasury … bond spread reflects a convenience yield that investors attribute to Treasury debt. Changes in the supply of Treasury debt …