Question

why has the 10-year treasury bond rate fallen ? As of 12/31/19 it was 1.92, and today it is around 0.81. hat has been the corresponding effect on its price?

Answer 1

Answer-

A day after U.S. stock benchmarks recorded their biggest one-day selloff in two years, investors are taking shelter in the deepest, most liquid safe house asset on the planet — U.S. Treasurys.

Fears the COVID-19 outbreak could defer a worldwide financial recuperation for longer than anticipated has attracted investors to government bonds. But more extensive, long haul factors like slow financial development, lukewarm swelling expectations and not enough safe assets to go around have all contributed to the yield decay this year, analysts said.

The 10-year Treasury note yield TMUBMUSD10Y, 0.816% fell 4.9 basis points to exchange at 1.328% on Tuesday, falling as low as 1.31% to surpass its previous record low of 1.325% set in June 2016, Tradeweb information show. This comes after the 30-year security yield TMUBMUSD30Y, 1.622% dropped to another untouched low toward the finish of last week. Security prices move the opposite way of yields. Past the prompt coronavirus fears, investors have also highlighted further factors for pushing security yields lower, such as depressed interest rates abroad, a persistent drop in development and expansion rates, and an absence of safe assets that can equal the profundity and liquidity of the U.S. Treasurys market.

As coronavirus fears have grabbed hold, investors have sought shelter in government paper even as the pay procured from holding such bonds declines. It helps that couple of cash managers dread the corrosive effect of swelling on fixed-salary returns, with price pressures staying muted despite more tight work markets.