Flight to Safety

Following last night’s announcement from Reserve Funds that its $65 billion Reserve Primary money-market fund had ‘broken the buck’, there has been a flood of assets making their way into short-term US Treasuries. Overnight, the yield on the three-month US Treasury declined by 66% from 0.70% down to 0.23%.  As shown below, yields haven’t been this low (red line) since the Depression.

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