Treasuries Update: 10-Year Yield At Record Low

Includes: IEF, SHY, TLH, TLT
by: Doug Short

Note from dshort: At Friday's close the yield on the 10-year note was 1.93, the all-time low. This is further evidence that, despite the illustrations in this commentary, the U.S. economy is in "uncharted" territory.

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 US Department of the Treasury and the New York Fed's website for the FFR.

Here's a closer look at the past year with the 30-year fixed mortgage added to the mix (excluding points).

Here's a comparison of the yield curve at two points in time: 1) Friday's close and 2) the daily close on the market's interim high on April 29th. The S&P 500 is down nearly about 14% since then.

The next chart shows the 2- and 10-year yields with the 2-10 spread highlighted in the background.

The final chart is an overlay of the CBOE Interest Rate 10-Year Treasury Note (TNX) and the S&P 500.

The final chart shows the percent change for a basket of eight Treasuries since the initiation of the second round of quantitative easing on November 4th, 2010.

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