Treasury Snapshot: A Columbus Day Perspective

: The bond market is closed for Columbus Day while equity markets are nudging higher in anticipation of an end to the congressional stalemate on government closure and the debt ceiling. I've updated the charts below through Friday's close. The yield on the 10-year note closed the week at 2.70%, which is 127 bps above its 1.43% all-time closing low on July 25 of last year but 28 bps below its interim closing high on September 5.

The latest Freddie Mac Weekly Primary Mortgage Market Survey, last Thursday, puts the 30-year fixed at 4.23%, 92 bps above its all-time low of 3.31% in late November of last year but 35 bps below its interim high reported on August 22.

Here's a snapshot of the 10-year yield and the 30-year fixed mortgage since 2008.

A log-scale snapshot of the 10-year yield offers a more accurate view of the relative change over time. Here is a long look since 1965, starting well before the 1973 Oil Embargo that triggered the era of "stagflation" (economic stagnation with inflation). I've drawn a trendline connecting the interim highs following those stagflationary years. The red line starts with the 1987 closing high on the Friday before the notorious Black Monday market crash. The S&P 500 fell 5.16% that Friday and 20.47% on Black Monday.

Here is a long look back, courtesy of a FRED graph, of the Freddie Mac weekly survey on the 30-year fixed mortgage, which began in May of 1976.

The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is the Daily Treasury Yield Curve Rates from the US Department of the Treasury and the New York Fed's website for the FFR.

Now let's see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior.

For a long-term view of weekly Treasury yields, also focusing on the 10-year, see my Treasury Yields in Perspective, which I update on weekends.