I've updated the charts below through yesterday's close. The S&P 500 is at a new interim high of 1,480.93 set yesterday, Jan. 17. The 10-year note closed yesterday at 1.89, which is four basis points off its interim high of 1.93, set on Jan.4. The historic closing low was 1.43 on July 25.
The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.38%, seven basis point above its historic low set in November. Here is a snapshot of selected yields and the 30-year fixed mortgage starting shortly before the Fed announced Operation Twist.
For an eye-opening context on the 30-year fixed, here is the complete Freddie Mac survey data from the Fed's repository. Many first-wave boomers (my household included) were buying homes in the early 1980s. At its peak in October 1981, the 30-year fixed was at 18.63%.
The 30-year fixed mortgage at the current level is a confirmation of a key aspect of the Fed's QE success, and the low yields have certainly reduced the pain of Uncle Sam's interest payments on Treasuries (although the yields are up from recent historic lows of this summer). But, as for loans to small businesses, the Fed strategy is a solution to a non-problem. Here's a snippet from the latest NFIB Small Business Economic Trends report:
Six percent of the owners reported that all their credit needs were not met, down 2 points. Twenty-eight (28) percent reported all credit needs met, and 52 percent explicitly said they did not want a loan. Only 3 percent reported that financing was their top business problem, compared to 23 percent citing taxes, 23 percent citing weak sales and 18 percent citing unreasonable regulations and red tape.
A Perspective on Yields Since 2007
The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the U.S. Department of the Treasury and the New York Fed's website for the FFR.
Now let's see the 10-year against the S&P 500 with some notes on Fed intervention.
For a long-term view of weekly Treasury yields, also focusing on the 10-year, see my "Treasury Yields in Perspective."