Treasury yields continue big move lower

|By:, SA News Editor

This just in: Interest rates are headed lower. The 10-year Treasury's 5 basis point dip today to 2.60% brings the yield down 40 basis points since touching 3% earlier this month. The 2-year yield - which touched more than a 2-year high of 0.52% just after Labor Day - has returned to 0.33%. Making the biggest move is the 5-year note - down nearly 50 basis points since September 5th to 1.38%.

Last week's non-taper is a factor, but yields were sliding well before that. Jeff Gundlach finds it hard to believe Ben Bernanke is going to initiate a taper just ahead of his exit from the central bank - wait till next year, he says. Jim Grant never bought that the taper was coming in September and - like Gundlach - doesn't expect it happening in 2013. "The Fed believes that it is in charge," he quips. It believes "it's Atlas with the world on its shoulders ... how can you protect against systemic risk when you are systemic risk?"

TLT +0.4%, TBT -0.8%.

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