Investor Fear: The Treasury Bond Chart In This Article Is Worth 1,000 Words!

By | February 9, 2016

In mid-December 2015, and for the first-time in about eight years, the Janet Yellen-led Federal Reserve raised short-term rates .25%!

In a normal financial, political and economic environment one would therefore assume that the economy is in strong enough to warrant a rate hike and that inflation is at or very close to the Fed’s target rate.

You would also assume that as a result of raisng the fed funds rate that short-term treasury yields would rise accordingly.

But of course these are not normal times and, as the chart below shows (courtesy of Bloomberg), the flight to quality since the Fed rate hike in mid-December has pushed the 10-year treasury yield straight down to 1.75% along with serious declines in crude prices and the stock market!

federal reserve,interest rate chart

Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at mhaltman@hallmarkabstractllc.com.

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