Treasury Snapshot: 10-Year Closing Yield Highest Since October 2011

Includes: IEF
by: Doug Short

What's New: I've updated the charts below through today's close (June 20). The latest Freddie Mac Weekly Primary Mortgage Market Survey, out today, puts the 30-year fixed at 3.93%, down five bps from last week, but that precedes the bond market's reaction to yesterday's Federal Reserve meeting summary and Chairman Bernanke's press conference. As I type this, puts the 30-year fixed at 4.05%.

The yield on the 10-year note closed today at 2.41%, its highest close since 2.42% on October 27, 2011. Prior to that was the slide from the 3% plus range in the summer of 2011. The S&P 500 is now up 11.36% for 2013 and 4.85% below the all-time closing high of May 21.

Here is a snapshot of the 10-year yield and Fed Funds Rate since 2008.

(Click to enlarge)

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.

(Click to enlarge)

Now let's see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior. It will be interesting to see how the index fares in the wake of the latest Fed communications on the timetable and conditions for tapering QE.

(Click to enlarge)

For a long-term view of weekly Treasury yields, also focusing on the 10-year, see my Treasury Yields in Perspective, which I update on weekends.