US 2-Year Treasury Yield Hits Record Low... "Fed Negative Rate Expectations Rise"
[Asia Economy Reporter Jeong Hyunjin] Amid the red alert on the global economy due to the impact of the novel coronavirus infection (COVID-19), the yield on the U.S. 2-year Treasury note hit a record low on the 7th (local time), according to Bloomberg and other reports.
According to Bloomberg, the yield on the U.S. 2-year Treasury note fell from the previous trading day's closing price of 0.1784% to 0.1388% on that day, closing at a record low. The previous lowest yield was 0.1532% in September 2011 during the European debt crisis.
This is due to the growing market expectation of a decline in interest rates. The market is increasingly anticipating that U.S. Treasury yields could fall into negative territory. This implies rising expectations that the U.S. Federal Reserve (Fed) might lower its benchmark interest rate below zero.
Hot Picks Today
As Samsung Falters, Chinese DRAM Surges: CXMT Returns to Profit in Just One Year
- "Most Americans Didn't Want This"... Americans Lose 60 Trillion Won to Soaring Fuel Costs
- Man in His 30s Dies After Assaulting Father and Falling from Yongin Apartment
- Samsung Union Member Sparks Controversy With Telegram Post: "Let's Push KOSPI Down to 5,000"
- "Why Make Things Like This?" Foreign Media Highlights Bizarre Phenomenon Spreading in Korea
The Fed lowered its benchmark interest rate to 0.00?0.25% in response to the economic recession caused by COVID-19 but has shown a negative stance toward negative interest rates. However, as the economic downturn is expected to be more severe than anticipated, market opinions are increasingly suggesting that adopting negative interest rates may be inevitable. Economist Kenneth Rogoff of Harvard University recently stated, "The Fed will lower interest rates into negative territory."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
