The Bond Market’s Weird and Scary Breakdown Is Still a Riddle
One year on, we’re far from getting to the bottom of that bizarre spike in Treasury yields.
How well do you remember what happened on March 19, 2020?
Photographer: Victor J. Blue/Getty Images
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Amid the rash of Covid-19 anniversaries, it was easy to miss that the pandemic’s scariest financial moment just turned one. On March 19 last year, the 10-year Treasury completed a bizarre rebound, hitting 1.27%. On March 9, it had dropped to 0.31%, an all-time low. A gain of almost a full percentage point in barely a week, against the background of actions meant to keep yields low, qualifies as one of the weirdest moments in financial history. On the face of it, the market looked to have broken down. For some reason there had been massive selling of Treasuries at a time of extreme high risk, which would normally be exactly when investors would be expected to buy.