It’s Crazy in the Treasury Market, but the Corporate Bond Market is Starting to Dial in the Coronavirus

by Wolf Richter
Wolf Street

Airline bonds, holy moly.

Someone got spooked. The US Treasury 10-year yield plunged in a magnificent manner to a new record low of 0.66% on Friday morning. When the yield of a bond drops, its price rises, and investors who were long these Treasuries made some money. The yield started out this year at about 1.9%, and meandered lower. By February 20, it was 1.57%. This was the date the economic consequences of the coronavirus began to sink in. A breathless plunge commenced, including a 25-basis-point plunge early Friday to 0.66%. By the close of Friday, it had ticked up 0.74%, having plunged by half in two weeks:

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