First Time Ever: Entire Yield Curve Crashes Below 1.0%

Mish

The 30-year long bond yield crashed below 1.0% this morning to a record low 0.958%.

The global stock market and bond markets are in a state of panic over the coronavirus. Day after day it's been a case of lower and lower yields.

This morning, the yield on the 30-year long bond crashed another 24 basis points to yet another record low. The entire yield curve is below 1.0%. Yet inversions persist out to two years.

Crash!

The 30-year long bond yield is now inverted with the Fed Funds Rates by 12 basis points.

The Fed is going to cut rates to zero on its next move.

What's Happening?

  1. Oil Price War and Liquidity Crisis Coming
  2. Crude Dives to $30, a Whopping $20 Below Cost of Production
  3. Italy Quarantines Over 25% of the Population, Trump Not Concerned
  4. Very Deflationary Outcome Has Begun: Blame the Fed

This is precisely what happens when Fed-sponsored asset bubbles break.

But other than that, It's Just Like The Flu™ .

Mike "Mish" Shedlock

Comments (23)
No. 1-9
BoneIdle
BoneIdle

Will the Fed buy up the fracking companies debts to keep US oil flowing?

Can the Fed buy up 401’s and pension funds to stop panic?

Australia’s prime minister is considering helicopter funds into the general public’s bank accounts. This happened during the last GFC but wasn’t overly effective. People paid down debts or bought big screen TV’s

jfs
jfs

Oh my lord! I know it's only interest rates, but it's shocking. Are we headed for negative interest rates?

Casual_Observer
Casual_Observer

Tomorrow is going to be ugly. Circuit breakers kicked in on the futures market. This is reminiscent of the markets after 9/11.

crazyworld
crazyworld

All these assets price collapses will again hurt the banking system.
Like the 2008 bubbles crisis, this new one in preparation right now could again bankrupt the banking system everywhere.
Negatives interest rates over here in Europe have contributed already to a serious weakening of the banks by reducing some of their safe revenues. As banks tried to increase revenues, another big quantity of speculative debts have in turn be agreed upon causing the excessive rise in real estate and stocks values we witnessed so far.
Over here in Europe the interest rates being already negatives, there is for our Disneyworld central bankers, only the "helicopter money" solution remaining to fight an economic severe recession.

Just in case this severe crisis go on, it is important to verify that our bank accounts (probably assets included) over here (and values in vaults ) do not exceed the guaranty limit.
I would not rely on helicopter money to save the bank deposits (exceeding the guaranty) of (average medium class people, not the richest ones who control money printing one way or another) people having some savings

Deflation is way long overdue, but it dont happen normaly in Dysneyworld .

JonSellers
JonSellers

When the 30 year is lower than the FFR, Mr. Market is screaming for the Fed to cut rates. The Fed will cut rates 1% over the next 2 weeks. And it will do nothing.

KidHorn
KidHorn

Wouldn't be shocked if the NYSE and Nasdaq don't open today.

bradw2k
bradw2k

Zoiks, I just got completely out of 30T's. I will let the experts try to ride it further beyond this insane jump.

Christian dk
Christian dk

To Mish
Could you incl the bond price along with the yield...
To show the .."profits" made by buying a 10y ect.. bond last year ect....
So some body is making a killing, when rates DROP...
Mike


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