Capital Market Update: Today’s Treasury Market Activity

The spread between the 10-year Treasury yield and the 2-year rate fell to negative 5 basis points, its lowest level since 2007.

The spread between 3 month Treasury bonds and 10 year Treasury bonds just hit negative 50 basis points. We haven’t seen that happen since March 2007. When the spread between 3 month Treasury bonds and 10 year Treasury bonds goes negative for at least three months, we have a recession 100% of the time. We have to watch this indicator.

Investors are starting to flock to precious metals. Gold and silver are considered to be “safe haven assets” during a financial crisis, and right now gold and silver are rising in price. The silver market is again sharply higher and hit another two-year high overnight.

It is going to be far more important to build up an emergency fund as we head deeper into this new crisis. The reason why so many Americans lost their homes during the last recession was because they were living right on the edge financially. Young people are usually the ones hit the hardest.

We have not seen an economic environment like this in a decade, and there is no reason to believe that we will be rescued from this potential recession.

Call Jay Quinn for more market insights 949-221-1804

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