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Commentary Topic from greenfaucet

As the Fed Funds Rate Approaches Zero, the Debate Rages On

Just a few short months ago, it was unthinkable. A year ago, it was beyond the pale. But the extraordinary arrived yesterday when the 10-year Treasury yield fell to lows previously unseen. The 10-year closed on Tuesday at 2.69%, a record low. The embedded message is clear: the market expects deflation, or something close to it. In the rush to find a safe haven, investors are bidding up the prices of government bonds to extreme levels. In turn, yields are falling to depths few thought possible.