Yield Testing Support

Friday, December 19, 2008

One result of the current financial crisis has been a dramatic reduction in prices (i.e. real estate, oil, stocks, etc.) The scenario for the yield on US Treasury bonds (as with the fed funds rate) has been no different. For some perspective, today's chart illustrates the significant decline of both the fed funds rate (gray line) and the 10-year Treasury bond yield (thick blue line). As concerns over a potentially deep recession have increased and fears over inflation diminished, investors have moved significantly towards safety resulting in a dramatic decline of the 10-year Treasury bond yield (especially over the past couple of months). As today's chart illustrates, the long-term 10-year Treasury bond is once again testing resistance of its 23-year downtrend.

Source: http://www.chartoftheday.com/20081219.htm?T


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