Over the past few weeks, the yields for short-term Treasuries have plunged. The yields are basically near 0%. Itâ??s one thing to have very low yields for 1-month T-bills, but now youâ??re not getting much for socking youâ??re money away from 12 months.
To give you an idea of how low interest rates are, if you lend Uncle Sam $1 million for one day at one basis point, you get about 28 cents for your troubles.
Check out the plunge in yields:
And donâ??t pin this on the Federal Reserve. Most of the QE2 buying has been in the middle of the yield curve.
Personally, I had been expecting the Fed to raise rates sooner than most people had expected. Apparently, Mr. Market disagrees and expects rates to stay low for a while longer.
Posted by Eddy on May 10th, 2011 at 10:03 pm
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 for the last four years in a row. (more)
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