The 2001 - 2007 time period began and ended with 10 -
year treasury yields of about 5 %.
The market with an earning yield of about 5 % looks much more attractive than 10
year treasury yields of 3.5 %.
But I am very pleased with the income potential — a 2.2 % return compares favorably to current 10
year treasury yields of about 2.7 %, considering that treasuries have no real capital gain potential, which could be significant over a 10 year period in the index stock funds.
The yield on equities is roughly 2.2 % versus the 10 -
year Treasury yield of 1.5 %.
At a 10 -
year Treasury yield of 1.7 %, interest on reserves of 0.25 %, and a monetary base now at about 18 cents per dollar of nominal GDP (see Run, Don't Walk), further purchases of long - term Treasury securities by the Fed would produce net losses for the Fed in any scenario where yields rise more than about 20 basis points a year, or the Fed ever has to unwind any portion of its already massive positions.
However, relative to the 10 -
year Treasury yield of about 2.5 %, it appears reasonably valued in our opinion.
4 Based on 10 -
year Treasury yield of 2.40 % on March 31, 2017.
Not exact matches
LONDON, April 30 - The 10 -
year U.S.
Treasury yield's rise above 3 percent last week for the first time in over four
years may be cause for concern across wide swathes
of financial markets, such as equities and emerging markets.
NEW YORK, April 23 - The U.S. dollar rallied to a four - month high on Monday as the 10 -
year Treasury yield's climb toward the psychologically important 3 percent level spurred buying
of the greenback, leaving the euro and yen lower.
Elsewhere, the dollar held at a three - month high against a basket
of currencies, after having received a boost from U.S. 10 -
year Treasury yields holding near the key 3 percent level.
They typical
yield around 4 percent while a 10 -
year U.S.
Treasury bill
yields 2.58 percent as
of Friday.
«The spread between the 2 -
year and 10 -
year Treasury is now the tightest it's been since 2007,» said Rob Morgan, chief investment officer at Sethi: «The flattening
yield curve in 2007 was a harbinger
of the Great Recession
of 2008.
That's exactly what has happened over the last month, as shown in this graph
of the
yield on the 10
year US
treasury bond for the last
year (keep in mind that
yields going up means prices going down):
The
Treasury Department auctioned $ 29 billion in seven -
year notes at a high
yield of 2.952 percent on Wednesday.
Instead
of shooting skyward after the Federal Reserve hiked interest rates last week,
yields on the 10 -
year Treasury note fell — and have been steadily falling ever since.
But
yields on the 10 -
year Treasury fell after the announcement from the IMF, suggesting that traders might believe that the IMF statement signals a shifting
of attitudes on the likelihood
of a September interest rate hike.
U.S. borrowing plans this
year and next will see a sharp rise in the sale
of Treasurys and affect prices and
yields, says Omar Slim
of PineBridge Investments.
The longest portion
of the offering, a 30 -
year security,
yields 1.95 percentage points above
Treasuries, after initial talk
of around 2.15 percentage points, according to people with knowledge
of the matter, who asked not to be identified as the details are private.
The market has likely already factored in
Treasury yields above 3 percent for the 10 -
year, says Kieran Calder
of Union Bancaire Privee.
The longest - term portion
of the offering, $ 8 billion
of bonds maturing in 30
years, sold originally at 99.4 cents on the dollar to
yield 1.95 percentage point more than comparable
Treasuries.
(Repeats to additional subscribers) NEW YORK, April 24 (Reuters)- The U.S. benchmark 10 -
year Treasury yield topped 3 percent for the first time in more than four
years on Tuesday, a milestone that reflects the durability
of the U.S. economic expansion and stokes the view the three - decade - old bull market in bonds is numbered.
In a sign
of market interest, the longest portion
of the offering, a 40 -
year security may
yield 1.45 percentage points above
Treasuries, down from initial talk
of 1.6 percentage points to 1.65 percentage points, said the person, who asked not to be identified as the deal is private.
The pan-European STOXX 600 benchmark ended flat at the end
of a choppy day, marginally weighed down after the U.S. 10 -
year Treasury yield rose above 3 percent for the first time since 2014.
The 10 -
year Treasury note
yield hit a high
of 2.99 percent, threatening to reach 3 percent.
The U.S. Federal Reserve's gauge
of inflation remains stubbornly below its 2 percent target, but U.S. 10 -
year Treasury yields spiked to near four -
year highs in January as a bond sell - off gathered steam.
The Vanguard High
Yield Corporate Bond fund has underperformed
Treasuries in the recent downturn, but it still has a positive return
of 0.5 percent in the
year - to - date through Oct. 27.
The
yield on the benchmark 10 -
year Treasury note hit the key psychological level
of 3 percent Tuesday for the first time since January 2014.
Comparing them to a 30 -
year Treasury bond
of 3 % (133 %
yield ratio) and 1.9 % core inflation, their value is evident.
During a webcast presenting his 2017 outlook, Gundlach, the founder
of DoubleLine Capital, said certain «second - tier» managers were focusing on 2.6 % as an important level for the 10 -
year Treasury yield — a threshold beyond which the bull market in bonds would end.
«The rise
of 10 -
year U.S.
Treasury yields in tandem with a stronger dollar have been the key drivers
of this downturn,» the IIF said.
The
yield on the 10 -
year Treasury fell below 2 % for the first time since May 2013 in early trading in Europe, while gold rose to a three - week high
of $ 1.213.60 a troy ounce, as investors once again shunned anything that smelled remotely
of risk.
The U.S. 10 -
year Treasury yield hit a high
of 2.854 percent, its highest level since Jan. 23, 2014.
If true, this should accelerate upward momentum
of Treasury yields and the U.S. dollar — currently at a 14 -
year high — which could dampen gold's chances
of repeating the rally we saw in the first half
of this
year.
Prior to some
of the past recessions, the two -
year Treasury yield rose above the 10 -
year yield, although at the moment, the former is still below the 10 -
year note, but has recently moved closer to it.
The outlook warned, however, that it is important to keep an eye on the
yield curve — which tracks the movement
of both the 10 -
year and the two -
year treasury yield.
Ms. Jones points out that from a low
yield of 1.38 percent in July 2016, the 10 -
year Treasury note now
yields nearly 3 percent.
One
of the best coincident and real - time indicators
of bursting bubbles and recessions is the
yield spread between US high -
yield corporate bonds and the 10 -
year US
Treasury.
Yields on 10 -
year Treasurys spiked to their highest level in roughly 10 months after Chinese officials recommended slowing or halting purchases
of them.
Luciano Siracusano, chief investment strategist at ETF and index developer WisdomTree (wetf), says the 1,400 dividend - paying stocks in the company's WT Dividend index now have average
yields of about 3 %, twice the
yield of 10 -
year Treasuries.
The
yield curve - the plot
of all
of the
yields on
Treasury securities
of maturities from four weeks to 30
years - is used as a signal
of economic health
of the economy.
Ten -
year Italian bond
yields have risen 17 basis points to 4.55 percent, since the news
of an uncertain outcome spread on Monday but the Italian
treasury is going ahead with a sale
of 6.5 billion euros ($ 8.5 billion)
of 5 and 10 -
year bonds on Wednesday.
Indeed, Randell Moore, who survey's economists as the editor
of the Blue Economic Indicators, says the current consensus is for the
yield on the 10 -
year Treasury bond to rise to 3.25 % by the end
of 2015.
The average stock on the S&P 500 stock index has a dividend
yield of about 2 percent whereas the 10 -
year Treasury note
yields 1.7 percent.
The 10 -
year U.S.
Treasuries yield rose back to 2.888 percent from last week's low
of 2.793 percent.
Though its risen recently, the real
yield on the ten
year Treasury hovers below 1 % (the 2.48 % rate, minus projected inflation
of at least 1.5 points), an extremely favorable number by historical standards.
Pimco, one
of the world's largest bond fund managers, and widely followed Guggenheim Partners are among the investors who say benchmark 10 -
year Treasuries yielding 3 percent - now within reach - are too hard to resist.
LONDON, April 30 (Reuters)- The 10 -
year U.S.
Treasury yield's rise above 3 percent last week for the first time in over four
years may be cause for concern across wide swathes
of financial markets, such as equities and emerging markets.
The
Treasury Department auctioned $ 35 billion in five -
year notes at a high
yield of 2.837 percent on Wednesday.
The flattening
of the
yield curve could be exacerbated by Chinese sales
of 5 -
year Treasury notes.
Contributing to the stock market's agita so far this
year has been the prospect that the 10 -
year US
Treasury Bond
Yield may be on the verge
of rising above 3.00 %, a level...