U.S. 10-year yields fall below 1% for first time ever
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) - U.S. benchmark 10-year Treasury yields on Tuesday fell to a record low below 1% after the Federal Reserve slashed interest rates by 50 basis points in
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March 3, 2020
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – U.S. benchmark 10-year Treasury yields on Tuesday fell to a record low below 1% after the Federal Reserve slashed interest rates by 50 basis points in an emergency move to ease the economic fallout from the fast-spreading coronavirus.
U.S. yields were down across the board after the Fed action, as investors grabbed safe-haven Treasuries amid the uncertainty.
In a statement, the central bank said it was cutting rates to a target range of 1.00% to 1.25%. “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” it said.
Investors expected the Fed to cut interest rates after the Fed issued a statement late on Friday. But they did not expect it to move so quickly ahead of a scheduled monetary policy meeting later this month.
“The Fed kind of botched the operation here. They didn’t need to cut rates because it wouldn’t do anything to prevent the virus from spreading,” said Kim Rupert, managing director of global fixed income at Action Economics in San Francisco.
“Once again, the Fed gave into the market and I think this has unnerved investors. The whole thing appears ill-conceived,” she added.
In early afternoon trading, U.S. 10-year yields <US10YT=RR> fell to 0.96%, from 1.088% late on Monday. Earlier in the session, 10-year yields hit a record low of 0.906%.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Karen Brettell; editing by Jonathan Oatis and Dan Grebler)