Guest post by Doug Short.
Treasury yields have been a bit of a roller coaster ride for the past few months. The 10-year note had been hovering around the two percent level for the past few months after hitting its historic low of 1.72 immediately following the September 21st announcement last year of Operation Twist. Despite the Fed’s stated purpose of lowering long-term interest rates, the 10-year steadily rose to an interim high of 2.42 on October 27th, but it soon settled into a pattern of hovering around 2.00 with the one quick dip to 1.82 and an upper range of 2.11. But in mid-March the yield on the 10 surged to a closing high of 2.39 on March 19th and then declined to a hover range around 2.23.
Today’s disappointing jobs report triggered a bond rally with the yield on the ten falling to 2.07 at the close, a decline of 12 basis points from the previous close.
Here is a snapshot of selected yields and the 30-year fixed mortgage since the inception of Operation Twist.