The entire yield curve for U.S. bonds fell below 1% for the first time in history after an all-out price war between the world’s biggest oil exporters triggered an unprecedented global bond rally.
U.S. Treasury yields plunged, with the rate on 30-year bonds diving as much as 59 basis points, as rising expectations the Federal Reserve will cut policy rates to 0% in the coming months drove investors to reach to longer maturities for yield. U.K. government bond yields tumbled below zero for the first time, Germany’s two-year bonds were close to a record, and rates in Australia and New Zealand fell to new lows.
The spread of the coronavirus and its fallout on supply chains and consumer spending have seen a dramatic repricing of global interest-rate expectations in the past month. The jolt lower in oil from the price war will sap inflation, increasing pressure on the Fed to take rates to the lowest since the global financial crisis.
Read more: Yahoo News.
