The yield on the 10-year Treasury is currently 1.88%, a three-month low. This signals the following:
–the jobs report is being interpreted as another sign of a weak economy, leading investors to turn to safe T-bills versus volatile stocks. This bids up the price of the bonds and lowers their yields;
–investors are not worried about inflation–they’re worried about growth;
–government debt is not crowding out private borrowing–that would show up as higher interest rates;
–the fact that borrowing is very cheap for the government right now is the market’s way of saying, “Please, borrow and stimulate! This austerity stuff is killing us.”
–I’m not sure anyone is listening.
YIELD ON TEN-YEAR TREASURY BOND, THIS WEEK