Here’s a Look at US Treasury Yields Following Bernanke’s Comments
The behavior of Treasuries is an area of special interest in light of the Fed’s second round of quantitative easing, which was formally announced on November 3rd. The first chart shows the percent change for a basket of eight Treasuries since November 4th. Yields have risen dramatically since then, although we’ve seen some reversal over the past two weeks, which coincides with the ongoing crises in the Middle East.
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 the time of the Fed’s QE2 announcement and the latest curve.
The yield spread had been widening in November and much of December, then contracted, and now show renewed signs of widening. 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 and the S&P 500 (NYSE:SPY).
Doug Short Ph.d is the author of dshort.com.