10 is 2.27 and 30 is only 3.39 Thats only a 112 basis point spread. Why is that happening and is it sustainable?
Huh? 112 is actually pretty steep... Highest it's been is smth like 160, lowest arnd 0, mean 50, median 42 (using data from 1993 onwards).
It's the same old "reasons": 1) The US can still be looked upon as being "creditworthy" despite the appearance of horrible underlying fundamentals. 2) There can be excessive speculation in the market that is bullishly biased. :eek: 3) Investors/traders are "looking for yield" and agressively buying longer-dated issues. 4) The FED may want to maintain the ~0% "target" on fed funds longer than people expect. 5) The 112 point spread may look "better" if you compare it to the 30-year yield instead of to itself.
Its small only in nominal numbers, the 30yr is actually yielding 50% more than the 10yr, its a big difference if you look at it that way. 5yr
Well, I dunno about you, but that's where the mkt is... If you think this spread should be higher, you know what to do, right?