The US Treasury sold $44 billion of two-year notes at a yield of 0.802 percent, the lowest on record, as demand for the safety of U.S. government securities surges going into year-end.Investors are piling into short-term Treasuries on concern that this year’s rally in risk assets has outpaced growth prospects and as Federal Reserve officials signaled interest rates will remain near zero for an extended period. Rates on some Treasury bills turned negative last week for the first time since last December, when global credit markets froze.
How low can we go? By the time the investment dealers take a markup on T-Bills the interest rate to a retail investor is next to nothing. This is nothing new but furthers emphasizes the point on the previous post that when interest rates turn upward there is going to be pain in bond-land. Read more here.
You must be logged in to post a comment.