The U.S. bond-market’s benchmark yield plunged below 1% on Tuesday, a possibility that few analysts and investors contemplated at the beginning of the year.
Investors have attributed the slide in U.S. Treasury yields to a combination of factors including slower global economic growth, the attraction of a positive return when negative-yielding debt is the alternative in Europe and Japan abroad, and the absence of any inflation threat.
But in the end, the spark for the furious rally in Treasurys on Tuesday came from a less abstract source: a surprise 50 basis point interest rate cut from the Federal Reserve to counteract worries that the spread of the COVID-19 epidemic would deliver a painful blow to consumer and market confidence.
(Read more: MarketWatch.com)
