America’s Bonds Are Caught in a European Tractor Beam
Yields on 30-year U.S. debt have fallen to record lows. Coronavirus is a factor, but so are the meager pickings available in Europe and Japan.
Bond yields boldly go.
Photographer: CBS Photo Archive/CBSThe yield on a 30-year U.S Treasury bond has finally fallen to a record low of 1.83%, having dropped a staggering 50 basis points this year already. With the coronavirus outbreak forcing people to look for havens, there are few signs that this investor frenzy for long-maturity sovereign debt is going to abate anytime soon.
The U.S. appears to be headed at breakneck speed toward the same incredibly low interest-rate return environment as Europe and Japan. If the trend continues, U.S. benchmark yields might end up flirting with zero — especially if the coronavirus becomes a pandemic and trashes global growth. There’s the added dimension of the democratic nomination race being led by the hard-left Bernie Sanders.