The 30
year treasury rate shows the return investors are willing to take in a «riskless» 30 year investment.
Not exact matches
Indeed, the 10 -
year Treasury yield hit a four -
year high on Friday after the latest monthly U.S. jobs report
showed solid wage gains, effectively confirming an expected
rate increase at the Federal Reserves next meeting, in March.
The light green line in the chart above
shows interest
rates would need to jump more than one percentage point to wipe out a
year of income in the two -
year Treasury note.
Taking this a step further, the chart above
shows that out of the most recent 23 periods of higher
rates (based on the 10 -
year Treasury yield), stocks have gained ground 19 of those times.
The blue chart
shows the 10 -
year Treasury interest
rates over time.
Treasury figures
show that 60 % of tax relief goes to higher
rate taxpayers, with 25 % — nearly # 10bn a
year — going to the top 1 % of earners.
Treasury analysis
shows that Labour's decision to raise the
rate to 50p for those earning # 150,000 a
year or more has generated up to # 2.4 billion a
year.
Fixed income sectors
shown to the right are provided by Barclays and are represented by the following Bloomberg Barclays Indices —
Treasury Inflation Protected Securities: U.S.
Treasury Inflation - Protected Securities (TIPS) Index; Floating
Rate Loans: US Floating -
Rate Note Index (BBB); Asset - backed securities: US Asset - Backed Securities Index; High Yield: US Corporate High - Yield Bond Index; Convertibles: US Convertible Bond Index; Mortgage - backed securities: US Aggregate Securitized MBS Index; Broad Market: US Aggregate Bond Index; Municipals: Municipal Bond 10 -
Year Index; Investment Grade Corporates: US Corporates Index
The following graph
shows the coupon
rate on a ten
year Treasury note, and the realized return from investing the coupons at money market
rates until the bond matured.
Research out from CBRE Econometric Advisors
shows that the typical risk - free benchmark
rate, the 10
year Treasury, does not accurately reflect the cost of capital risks in asset pricing for commercial real estate.
Using the 10 -
year U.S.
Treasury Bond yield as the proxy for interest
rates, Exhibit 1
shows the historical performance of the S&P 500 Low Volatility and S&P 500 indices in periods of significantly increased interest
rates.
The chart
shows the pattern of yields going back 46
years for the Fed funds
rate, T - bills, the ten
year Treasury note and long maturity treasur
Treasury note and long maturity
treasurytreasury bonds.
Avigdor says research
shows that the correlation between
rate increases and stock markets is positive until the yield on 10 -
year U.S.
Treasuries reaches 5 %.
An interesting chart that might represent how U.S.
rates could remain low on the back of the European economy for a while
shows the yield difference between the S&P Eurozone Sovereign Bond 7 - 10
Years Index and the S&P / BGCantor 7 - 10
Year US
Treasury Bond Index.
As of March 2, 2015, the U.S. 10 -
year Treasury bond is yielding 2.06 % on the release of a report
showing consumer purchases (adjusted for inflation) rose in January, reigniting the expectation that the Fed will take steps toward increasing
rates sooner rather than later.
This graph, also from Newfound Research,
shows 10 -
year U.S.
treasury bond
rates (which reflect interest
rates in general) since 1875.
One fly in the ointment: The 10 -
year Treasury yield, the benchmark for permanent, fixed -
rate financing in commercial real estate, has breached 5 % and even
showed some signs of volatility over the past month.
Results
show that the 5 -
year Treasury - indexed hybrid adjustable -
rate mortgage (ARM) averaged 2.92 percent this week with an average 0.4 point, up from last week when it averaged 2.84 percent.