Traders react after the closing bell at the New York Stock Exchange (NYSE) on August 5, 2019 at Wall Street in New York City.
Johannes Eisele | AFP | Getty Images
The coronavirus outbreak has pushed the yield on the 10-year Treasury bond to historic lows, marking the latest milestone in what has been a decades-long decline.
The moves have put the daily rate at levels not seen since at least the 1960s. According to data from the European Central Bank, it might be an even more historic fall.
The rate hit 1.145% on Friday, more than 25 basis points below where it closed the week before. Before this week's tumble, the recent low point for the 10-year yield had come at 1.37% in July 2016.
Monthly averages of the 10-year show that the yield has never been this low for a sustained amount of time. It is possible that a move on a given day was lower than 1.18%, but it hasn't held.
This latest drop has come as the coronavirus outbreak has muddled the outlook for the global economy and rattled equity markets. Bond yields move in the opposite direction of prices, so they fall when investors buy safer bonds and sell riskier assets. With major U.S. stock indexes plunging more than 10% this week, money has crowded into bonds.
The 10-year yield is a key measure throughout the economy because it used to anchor interest rates for other debt. For example, a falling 10-year rate often leads to lower mortgage rates.
Low rates on governments are not just an American phenomenon. Aggressive easing by central banks around the world since the financial crisis has pushed many benchmark interest...