10 Year US Treasury Bond at less than 3%

[sishya]

This is historical. How is it possible that the 10 Year Treasury Note only gives 3% Yield. With all the news about "Quantitative Easing" (Press money Printing), I am really surprised. If this goes on and becomes like a similar Japanese Govt Bond which yielded at one time only 1%, then I guess we can all have a happy time and I will be refinancing my 300K mortgage.

Any Bond market expert if Possible Please explain - Why are the yields low when we expect the printing press to fire ? Does Bond market expect all the new money to still idle even when the cost of money goes so much down ?

[brendan]

Re: 10 Year US Treasury Bond at less than 3%

Any Bond market expert if Possible Please explain - Why are the yields low when we expect the printing press to fire ? Does Bond market expect all the new money to still idle even when the cost of money goes so much down ?

I'm trying to understand this too. On the one hand, the government is handing out a bunch of bailout money and increasing its debt, and on the other hand it looks like the recipients of bailout money may just be parking it in treasuries. But why park money in treasuries with such low yields and with the government apparently starting up the presses? This just doesn't make a lot of sense to me.

It seems like this cycle has to break at some point as the flight to safety reverses, but what would be the trigger? Will the government finally get serious about really showing the market that they can and will cause inflation if they feel like it?

[metalman]

Re: 10 Year US Treasury Bond at less than 3%

I'm trying to understand this too. On the one hand, the government is handing out a bunch of bailout money and increasing its debt, and on the other hand it looks like the recipients of bailout money may just be parking it in treasuries. But why park money in treasuries with such low yields and with the government apparently starting up the presses? This just doesn't make a lot of sense to me.

It seems like this cycle has to break at some point as the flight to safety reverses, but what would be the trigger? Will the government finally get serious about really showing the market that they can and will cause inflation if they feel like it?

what did benny boy say about buying across the yield curve?