I think we may be seeing a "run" on yield. And maybe what looks like QE from the Fed is them jumping in and buying the "cheap" bonds. I think there is a chance that the 30-year may drop to 1% or even lower. When will this happen if current trends continue?
Lets look at the history of the 30-year yield from the Treasury Dept.
3.0% 3/19/19
2.9% 5/6/19
2.8% 5/22/19
2.7% 5/28/19
2.6% 7/25/19
2.5% 7/31/19
2.4% 8/1/19
2.3% 8/5/19
2.2% 8/9/19
2.1% 8/22/19
2.0% 8/26/19
1.9% 9/6/19 (projected)
1.8% 9/20/19 (projected)
1.7% 10/4/19 (projected)
1.6% 10/18/19 (projected)
1.5% 11/1/19 (projected)
1.4% 11/15/19 (projected)
1.3% 11/29/19 (projected)
1.2% 12/13/19 (projected)
1.1% 12/27/19 (projected)
1.0% 1/10/20 (projected)
Now, I certainly hope this doesn't happen, but it looks like a slow-motion collapse of the entire economic system is happening right now. If true, when did it start? I think it started on July 31 when the Fed cut short-term rates to 2.1%. You would think that cutting rates would help head off a recession, but in this case the rate cut started the slow-motion collapse. Because when rates are cut once, you know they will be cut again and again and again (and again). And investors have to snap up the yield while the getting is good.
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