Today the 10 year treasury hit an all time low of 1.62% as of just a few minutes ago. Contrary to the confident headlines you may read tomorrow, the reasons for this are various, possibly cumulative, and no one knows with certainty. We will give you our thoughts in order of our internal probability for clarity from our side of the fence. So here we go:
- Fear from overseas issues (Money moving from other fragile economies into ours)
- Fear of Equity markets (Fixed income has continued positive money flow)
- Signal of a slowdown here in the US (Low rates often signal a slower economic time)
- The FED has won – Recall the fed wants lower rates for housing and economic growth (We think this a low probability)
Again, any or all may be reasons, but when you read the possible overconfident headlines, remember no one knows for sure!
Have a Great Day, below is the last chart of the week, we promise!
Friday we will have a fun uplifting post that a fellow professional investor quoted to start your weekend happily!
This is a two-day chart of the 10 year treasury yield. Lower chart means lower yield.
Courtesy, TC 2000.