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The Impact of Treasury Yields on US Presidential Approval, 1960–2010

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  • Iain Hardie
  • Ailsa Henderson
  • Charlotte Rommerskirchen

Abstract

The ‘power of bond markets’ is a widely assumed and poorly understood feature of the global economy. We demonstrate that even in a bond market as stable as the United States this influence is considerable. In this article, we scrutinise a particularly direct influence, the impact of US Treasury yields on presidential approval rates. Our empirical analysis from 1961 to 2010 demonstrates that rising/falling bond yields lead to a decline/increase in approval rates. We show that this impact is mediated via the US mortgage market. The stronger the rise in mortgage rates, the stronger the influence of Treasury yields on presidential approval. We then outline the broader possible political impacts of this, particularly given foreign and domestic central bank ownership of US Treasuries.

Suggested Citation

  • Iain Hardie & Ailsa Henderson & Charlotte Rommerskirchen, 2020. "The Impact of Treasury Yields on US Presidential Approval, 1960–2010," New Political Economy, Taylor & Francis Journals, vol. 25(6), pages 1022-1040, September.
    • Handle: RePEc:taf:cnpexx:v:25:y:2020:i:6:p:1022-1040
    DOI: 10.1080/13563467.2019.1680962
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