Rates Market Sleepwalks Back Toward Historically Low Yields
- Yields likely headed lower as hopes for fiscal deal fade: PGIM
- Powell, Mnuchin testimony unlikely to provide fresh catalyst
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The Treasury market is sedated, and it’s hard to find anyone who thinks yields will do anything but shuffle along or sink further.
A measure of expected volatility for the next month hit an historic low this week after the Federal Reserve pledged to keep its policy rate at zero until inflation is “moderately above 2% for some time.” The depressed levels of long-end yields suggest investors aren’t concerned about that happening any time soon: The 10-year rate has been stuck in a range of barely 10 basis points all month, and is less than 40 basis points above its record low.