Investors fled back into the panic room today. Frantic of T-bills buying pushed two-year yields to the lowest since March, where they hit rock bottom as investors were shaken by the collapse of Bear Stearns.
Two-year note yields were already very low, below the depressed levels of September and October. Yields fell three basis points, or 0.03%, to 1.32%. For now, at least, we’re holding above the level seen in 2003, when two-year yield reach a yield of about 1.06%.
According the the Wall Street Journal, Wall Street analysts expect yields to continue to plunge.
“HSBC economists expect the Fed to trim the target rate to zero by the end of June, which would push down the two-year note’s yield to 0.3%. Friday, the two-year note yielded 1.572%. Credit Suisse predicts the two-year yield will drop to 1% by the end of the year and dive to 0.5% by the first quarter of 2009,” the Journal’s Min Zeng wrote on Monday.
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