Treasury Snapshot: All Eyes On The Fed

Ben_BernankeDoug Short:¬†With this afternoon’s release of the FOMC minutes and Chairman Bernanke’s press conference on tap, I’ve updated the charts below through yesterday’s close. The yield on the 10-year was at 2.85%, which is 142 bps above its 1.43% all-time closing low on July 25th of last year and 13 bps below its interim closing high on September 5th.

The latest Freddie Mac Weekly Primary Mortgage Market Survey, released today, puts the 30-year fixed at 4.42, 111 bps above its all-time low of 3.31% in late November of last year and 16 bps below its interim high reported on August 22nd.

The 30-year Treasury closed yesterday at 3.88%, only 4 bps off its interim high of December 5th.

Here is a snapshot of the 10- and 20-year yields..

A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of “stagflation” (economic stagnation with inflation). I’ve drawn a trendline connecting the interim highs following those stagflationary years. The red line starts with the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&P 500 fell 5.16% that Friday and 20.47% on Black Monday.

Here is a long look back, courtesy of a FRED graph, of the Freddie Mac weekly survey on the 30-year fixed mortgage, which began in May of 1976.

A Perspective on Yields Since 2007

The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007.

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