Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  Treasury Returns May Be About To Hit A Wall On Two Fronts
Posted Under: Bond Market
Supporting Image for Blog Post


View from the Observation Deck

  1. The yield on the benchmark 10-Year T-Note is trading at around 1.65% as of 6/12/12. It closed at an all-time low of 1.45% on 6/1/12.
  2. While extremely low interest rate levels have helped to stabilize the housing market, they have not been kind to savers, particularly retirees.
  3. Even if the Federal Reserve were to launch a third quantitative easing it is debatable how much further rates can fall.
  4. Remember, the Fed's QE2 ("Operation Twist") initiative of swapping out of shorter maturities in favor of longer maturities was ineffective for the first seven months.
  5. The yield on the 10-Year T-Note was 1.94% on 9/20/11 (day before Operation Twist). The yield rose to 2.36% on 3/20/12 only to fall back to 1.96% on 4/20/12. Essentially no change from 9/20/11.
  6. It was not until the escalation of the sovereign debt crisis in the European Union in May that intermediate Treasury rates fell to an historic low. It induced a flight to quality.
  7. In our opinion, those investors using intermediate or long-term Treasuries as a safe haven should not expect returns moving forward to be as rewarding as those in the chart.
Posted on Tuesday, June 12, 2012 @ 2:42 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

Why Cash is Still King
Takes More And More Stimulus To Move An Economy This Big
Retail Investors Give Stocks A No Confidence Vote
Time to Develop an Exit Plan from Intermediate & L-T Treasuries
Don't Fear Stocks If Inflation Climbs Above 3.0%
Investors Have to Make a Decision
The Business of Energy Distribution
Senior Loans are a “Go To” Income Vehicle when Rates Rise
If You Can't Beat Them, Join Them!
Passive Investing More Popular Than Active Management Since 2007
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.