30-Year Long Bond Yield Crashes Through 2% Mark to Record Low 1.98%

-edited

The bond rally continues this evening with the Fed in denial and Trump howling.

Futures are up a bit this morning as of 1:00 AM central following yesterday's massacre.

However, bond yields are again lower. The 30-year long bond just crashed through the 2% level for the first time ever.

Don't Worry

The Fed has everything under control.

So does Trump, the ECB, Bank of Japan, China, Canada, Australia, and New Zealand.

What can possibly go wrong?

Mike "Mish" Shedlock

Comments (27)
No. 1-11
Casual_Observer
Casual_Observer

Now 16T in negative yielding bonds. We havent even gotten started.

Ted R
Ted R

Let's see what stocks do today. Maybe the market will bounce back. Negative interest rates and a bear market in stocks don't mix well.

Maximus_Minimus
Maximus_Minimus

The bond market anticipating the return of the printing presses - and no return to normalcy in a lifetime.

Tater-tots
Tater-tots

Take a page from Mish and censor everyone you disagree with.

leicestersq
leicestersq

What happens when the tide turns?

Seems to me that if bond prices fall, then given all the rules out there for pension funds and other mutual funds, we might see a stampede, with forced sellers and few buyers.

What is the other possibility, that rates stay negative for ever? How can that happen unless central banks are always willing to buy bonds at negative rates of interest? If they do that, they have to inject more money into the system, and that will create inflation at some point. If inflation starts to take hold, negative interest rate bonds are going to become a fantastic widowmaker.

TheLege
TheLege

When the tide turns, run! Just imagine the thought of a multi decade bear market in both bonds and stocks - a mirror of the dying bull market.

Then we’ll see the monetary ammo come out in force. Followed swiftly by a new monetary system. Finally.

Matt3
Matt3

I assume that the Fed can only control the short end until they go the ECB plan and just buy the long end. So is the 30 year a market rate? Mainly driven this low by the lack of alternative bonds in the western world? If most of the EU is negative yields, anything positive would like great. Would this mean that a market rate on short term would be substantially less than what the Fed is trying to maintain? Is there anywhere we might see a rate that a central bank isn't manipulating?

jivefive99
jivefive99

From Marketwatch ...

"Back to Baumohl’s argument, who suggests looking past that argument: “The key determinant that will shape the path of the economy this time won’t be the yield curve or the direction of the fed-funds rate. It’s the extent to which American consumers will offset the damage done by policies that impede world trade and reverse globalization,” he told clients in a note."

The Hillary-ites, the globalists, the phony democrats, the billionaires who became multi-billionaires, the "We did so well the last 40 years, we need to continue that forever!" jerks, will never stop ... to them, all Americans need to do is borrow and spend ...

Tony Bennett
Tony Bennett

"The Fed has everything under control."

...

When Powell did his "mid cycle" adjustment and stocks down a bit. One "expert" said stocks down since FR admitted still a business cycle. Good grief.

astroboy
astroboy

Off topic but interesting I think. A few years back Greece leaving the Eurozone (read defaulting on their debts) had the EU underwear all twisted even though Greece is only 2% of the EU GDP. Now, the UK, a much bigger economy, is leaving with no deal in sight. I'd imagine this will result in an increase in the cost of doing business with the UK, or at least some sort of trade disruption.

  1. How do the effects of a hard Brexit compare to a Greek default? I realize this is sort of an apples to oranges comparison of course.

  2. Could it be the negative growth in German GDP and other countries is due to fears about this, as opposed to things generally going to hell in a handbasket (the two are not mutually exclusive).

  3. Does anyone really know what the effects of a hard Brexit will be?

bradw2k
bradw2k

Aaaand the 30-year pays less yield than the 1-month. Way to go, Powers That Be, you guys are SOOO smart!

I find this to be just silly funny ... too bad it is evidence for impending TSHTF.