Treasury Yields Fall Below 2%

24-Aug (Wall Street Journal) — Yields on benchmark U.S. government bonds tumbled below 2% for the first time since April on Monday as a deepening turmoil in global stocks and crude-oil markets boosted demand for haven assets.

The flight for safety has been gathering speed over the past few weeks, underscoring growing anxiety over China’s slowing economy and its stock market rout, which has rippled through markets globally and clouded the global economic outlook.

The uncertainty over whether the Federal Reserve will raise interest rates next month or wait longer to act has contributed to growing volatility in riskier assets, driving many to shed their risk appetites and shift focus to preserve capital.

“This is a flight to quality and the actual level that the Treasury yield achieves in this environment is not meaningful,” said David Keeble, global head of fixed-income strategy at Crédit Agricole. “This is a time when you dig a deep hole, close your eyes and put your fingers in your ears.”

[source]