Investor fear drives US Treasury yields to near zero

[mixin]

The panic in global financial markets has sparked an unprecedented rush into safe US Treasury securities, driving yields on short-term government notes down to almost zero.

Due to stampeding demand for safe short-term investments, the US Treasury's four-week and three-month bills on Friday yielded an effective rate of 0.01 percent -- down sharply from 1.515 percent and 1.785 percent, respectively, in early September.

Other Treasuries are also showing record low yields. The 10-year bond yield fell as low as 2.505 percent and the 30-year bond yield slid to 3.005 percent at one point on Friday. The six-month bond yielded a mere 0.20 percent.

Larson said the yield on the 10-year Treasury bond plunged from a mid-October high of 4.08 percent to nearly 2.5 percent this week, "yielding lows not seen since the mid-1950s."
Full Story:
http://www.breitbart.com/article.php?id=081207225000.rnygzmld&show_article=1&catnum=7

 

[gsgs]

Re: Investor fear drives US Treasury yields to near zero

is it investor fear or is it the governments who worldwide
put the interest rates down to help the economies ?

 

[sharon sanders]

Re: Investor fear drives US Treasury yields to near zero

Here is a good explanation of how the process works:

http://en.wikipedia.org/wiki/Treasury_security

 

[gsgs]

Re: Investor fear drives US Treasury yields to near zero

some sell shares some buy them.The number of shares stays the same.
Why should sellers re-invest in Treasury bonds more than
buyers sold them to gain the required liquidity ?

The available money is reduced by some billion$ because the shares
went down. If the ratio of Treasuries/shares remains constant
then more Treasuries should be sold now, not bought.
(and re-invested in paying bills, buying houses,...)

I mean, now investors and funds are realizing that they are overinvested in treasuries
and underinvested in shares so treasuries would be sold, not bought