Markets Saw Fed Rate Cut as Act of Desperation

“The 10-year US Treasury yield dropped below 1 per cent for the first time on Tuesday, after the Federal Reserve delivered its first emergency rate cut since the financial crisis in order to stave off the long-term economic impact from the spread of the coronavirus,” the Financial Times reports.

Bloomberg: “It is hard to exaggerate the historic significance of Tuesday’s events in the bond market… According to historical work by Robert Shiller, the Nobel laureate economist at Yale University who has reconstructed the 10-year interest rates available in the U.S. back to 1871, it has never before dropped this low. Many momentous events have shaken the U.S. since Ulysses S. Grant’s presidency, but none of them were sufficient to drive long-term money down to such cheap levels.”