US 10-year Treasury bond below 1% for the first time after Fed rate cut
by SOURAV D | VIEW 1075
A gauge of global stock indices had tumbled across the board on Tuesday (March 3rd) while on Wednesday (March 4th), a majority of stock indices opened up the day in a hesitant tone after Tuesday's (March 3rd) surprise Fed rate-cut by 50bps what Fed Chair Powell had branded as a contingency measure to grapple with a fast-spreading coronavirus outbreak which has been disrupting supply chains and curbing out demands all over the world, while the US 10-year Treasury bonds were trading below 1 per cent for the first time on record amid investors’ “flight-to-safety” response.
Besides, all of the US Government bond yields fell on Tuesday (March 3rd) as investors were seeking safety on safe-haven gold alongside government debts, as an emergency US Fed rate-cut decision had spooked the investors and sent a shockwave of overwhelming worries regarding the financial consequences of coronavirus outbreak, eventually leading to an en masse sell-off of riskier assets.
Apart from that, as a havoc-scale plunge of US stock indices on Tuesday’s (March 3rd) market despite a Fed rate-cut of 50 basis percentage point had been underscoring investors’ view that the Fed’s Tuesday’s (March 3rd) rate decision might be inadequate if the coronavirus outbreak turns in to a global-scale pandemic, a chief investment strategist at State Street Global Advisors in Boston, Michael Arone said on Tuesday’s (March 3rd) market closure, “The Fed’s pre-emptive strike against the coronavirus has backfired.
The reaction has signalled to the markets that the coronavirus is on par with things like the Great Depression, the technology-media-telecom bubble bursting or the global financial crisis. ” Citing statistics, while this report was being prepared, morning US trading hours on Wednesday (March 4th), US 3-month treasury bond was trading at 0.77%, 1-yr Treasury yield was at 0.58%, 2-yr treasury yield had been at 0.62%, while the long-term US government debts, widely contemplated as the second-most secured asset in the world after Germany’s treasury bond yield, were also hit with a heavy whiplash as 5-yr, 10-yr and 30-yr US treasury yields were at 0.71 per cent, 0.96 per cent and 1.58 per cent respectively.