The US 30-year hit 2.01% today -- a record low.
That is an extremely worrisome sign. It's the market flouting the Fed's credibility on inflation. Two percent is the FOMC inflation target and 30s being at that shows a market that believes they're not going to hit it now and they won't hit it in the long run.
The flipside of the argument here is that yields are being pulled lower because bond yields in Germany, Switzerland and Japan are negative or close to zero. We all laughed at the people buying bunds at 0% but those buyers are laughing now as yields have fallen to -0.62%.
I'm sympathetic to all those arguments.
At the same time, the 30-year at 2% shows a world that's headed in the wrong direction, whether that's low growth or low inflation is hardly a comfort.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.