A yield below four percent on the 10-year U.S. Treasury bond has been a rare sight indeed in the last 50 years. Trading below four percent in the early 1960s, the 10-year headed higher through the 1970s, and then soared in the 1980s, topping out over 15 percent. It passed under four percent during the easy money of the 2000 recession, and again as the Fed flooded the economy after the Lehman crisis. This week the 10-year touched four percent on its way up.
What's going on? Are rates rising from improvement in the economy? Or the markets demanding higher rates in fear of inflation and credit downgrades from the government flooding a struggling economy with too much money?
I'm getting to this later than I wanted to; four percent happened Tuesday, and today a weak unemployment report has sent the 10-year back to 3.85 percent or so. We'll consider the 10-year in another post tomorrow, but in the meantime, here's a graph of the last 50 years.