Treasury Yield Snapshot: 10 Year Still Hovering Near Two Percent
Doug Short | Feb 22, 2013 05:11AM ET
: I've updated the charts below through yesterday's close (February 21st). The S&P 500 has seen two days of selling and is now 1.86% off its interim high set on Tuesday. Many market watchers have been expecting a correction. But the yield on the 10-year note, which closed at 1.99%, remains where it has been hovering for the past four weeks. At this point the bond market isn't yet behaving as if the stock market were slipping into correction mode.
The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.56%. That's only 25 basis points above its historic low, which dates from the third week in November. However, its the highest weekly average since the end of August.
Here is a snapshot of selected yields and the 30-year fixed mortgage starting shortly before the Fed announced Operation Twist.
For a eye-opening context on the 30-year fixed, here is the complete Freddie Mac survey data from the Fed's repository. Many first-wave boomers (my household included) were buying homes in the early 1980s. At its peak in October 1981, the 30-year fixed was at 18.63 percent.
The 30-year fixed mortgage at the current level is a confirmation of a key aspect of the Fed's QE success, and the low yields have certainly reduced the pain of Uncle Sam's interest payments on Treasuries (although the yields are up from recent historic lows of this summer). But, as for loans to small businesses, the Fed strategy is a solution to a non-problem. Here's a snippet from the latest NFIB Fed's Bullard Urges Cutting QE Pace if Data Stay Strong .
For a long-term view of weekly Treasury yields, also focusing on the 10-year, see my Treasury Yields in Perspective.
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