Summary: The yield on the 10-year Treasury note hit 4.55% yesterday, its lowest level since February and significantly below its late June level of 5.25%. The yeild curve is now inverted, as the 10 year rate is below the rate on 2-year Treasury notes (4.65%), on 3-month Treasury bills (4.89%) and the overnight interbank rate (5.25%). Long term rates have been pushed down by concerns the economy is slowing and the housing market is in for a hard landing, though some think the bond market rally is merely technical. Low long term rates could support stock prices, buoy home sales and prices, and prolong the leveraged buy-out boom. Full WSJ article >
Related links: Bill Gross: Bond Prices Have Bottomed • Recession Around the Corner? • Yield Curve Forecast: Cloudy With a Chance of Rain • The Economy's Wake-Up Call: Are Investors Listening? • Recession 2007? Philadelphia Fed Index Turns Negative • More on the government bond ETFs: iShares Lehman 1-3 Year Treasury Bond ETF • iShares Lehman 7-10 Year Treasury ETF • iShares Lehman 20+ Year Treasury Bond ETF • iShares Lehman TIPS Bond ETF.
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