It’s Crazy in the Treasury Market, But the Corporate Bond Market is Starting to Dial in the Coronavirus

• It’s Crazy in the Treasury Market, But the Corporate Bond Market is Starting to Dial in the Coronavirus
  by Wolf Richter for WOLF STREET
  Someone got spooked. The US Treasury 10-year yield plunged in a magnificent manner to a new record low of 0.66% on Friday morning. When the yield of a bond drops, its price rises, and investors who were long these Treasuries made some money. The yield started out this year at about 1.9%, and meandered lower. By February 20, it was 1.57%. This was the date the economic consequences of the coronavirus began to sink in. A breathless plunge commenced, including a 25-basis-point plunge early Friday to 0.66%. By the close of Friday, it had ticked up 0.74%, having plunged by half in two weeks: (top of post)
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  Back in 2007, before the Fed’s interest-rate repression began, the 10-year yield was around 5%.  The chart below shows the trajectory of the 10-year yield since then. Steep drops and bounces are not uncommon, as you can see, but this plunge from over 3% in November 2018 to 0.74%, especially the stretch over the past two weeks, was something to behold:
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