Yield Plunge Stirs Thoughts of 1% Treasuries on Delta Variant
- Yield on 10-year note fell to 1.17%, lowest since February
- Bearish positioning may continue to provide fuel for gains
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Long-term Treasury rates tumbled to the lowest levels in months on Monday as the spread of the delta coronavirus variant called into question optimistic assumptions about economic recovery, also touching off a global stock market slump.
Market-implied expectations for a Federal Reserve rate increase were pushed further into the future amid stronger-than-normal debt-market volumes, and the rally in bonds drove benchmark 10-year yields down as much as 12 basis points to 1.17% on Monday. That’s a level unseen since early February and well below the 14-month high of 1.77% it reached in March. Some traders are now likely to begin looking toward 1%, a mark that hasn’t been breached since late January.