As of March 6th, 2020, the 10-year treasury rate is .77%, an all-time low. This level is markedly lower than the last low point of 1.32% achieved in mid-2016. The comparison with the same day last year is bone crushing. Last year the 10-year treasury was 2.36% on March 6, 2019. Our current rate is 68% lower than last year’s rate. This collapse is due to the worldwide fear of Coronavirus and the flight to safety into US treasuries. Due to the uncharted waters we are in macroeconomically, there is a huge fear premium reflected in these rates, as economists come to grips with the reality of negative rates for the first time in US history. Factoring in our inflation rate of 2.1%, we already have negative real interest rates. What remains to be seen if nominal interest rates go negative.
