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The Fed uses its buying power in the bond market to raise or lower interest rates by manipulating how much money is available in the economy.
The yield on the 10-year Treasury note surged to its highest level in three months this morning.
Rising bond yields are an optimistic sign, even though the Fed says a real recovery isn’t right around the corner.
But that may not be signaling that the economic damage from the coronavirus will be as bad as the Great Recession.
The yield on the benchmark 10-year Treasury dipped below 1% Tuesday.
The federal government sells more than a dozen different kinds of bonds. They all have very different purposes.
Traders may anticipate economic downturn, but regular consumers don’t seem too worried.
The S&P 500 index dropped nearly 3% as the market erased all of its gains from a rally the day before.
There is no perfect economic crystal ball, but the bond market often gives a indication of where the economy is heading.
Historically, an inverted yield curve has spelled recession.