Coronavirus, Oil Push Bond Yields to Record Lows: What It Means for You
The macroeconomic picture got even cloudier over the weekend, as a brand new issue blindsided investors. In addition to all the uncertainty about what the Covid-19 outbreak could have on the global economy, news that OPEC and Russia had failed to agree on oil output sent crude prices plunging toward $30 per barrel. Amid the chaos, investors fled to the perceived safety of Treasury bonds, and that sent yields on long-term Treasuries to historic lows. The 10-year yield dropped to just 0.3% Monday morning, while the 30-year yield fell to the 0.7% mark briefly.
As painful as the stock market plunge has been for investors, bonds have provided some offsetting gains for those who follow traditional asset allocation strategies. Beyond the investment world, the plunge in bond yields and oil prices could also have some positive impacts on consumers -- but it's unclear whether they'll be all that big compared to the potential disruptions from likely future measures like work closures and quarantines.
Back in 2017, the Federal Reserve's decision to start raising its short-term interest rates led to a dramatic increase in mortgage rates. That largely brought a long wave of mortgage refinancing to an end, as 30-year mortgage rates approaching 5% looked a lot less attractive than the 3.5% mortgages that were available at various points during the early 2010s.
Source Fool.com
