Impact of Coronavirus on 10-year US Treasury yields - charts and trends

2020 saw many records in the investment markets and the 10-year US Treasury yields were no exception as they saw record lows.

If we look at the data over the last year in the chart below (source: CNBC), then the impact of Coronavirus from February 2020 is clear.


A sharp dip into March 2020 and then a slow, steady recovery from August 2020, but not the same recovery to previous levels and beyond that we have seen in many of the stock markets. 

Indeed, if we look at the longer term trends going all the way back to the 1980s, then 2020 saw record lows as per the chart below (source: CNBC).


The chart also illustrates the longer term trend with a steady decline in the yields over the past forty years (the thought of a peak 15% yield back in the early 80s, where could you find that kind of yield these days!).

Looking at the longer term trends you may believe that the yields cannot get much lower and then a continued steady recovery is the likely way forward. 

But, as ever, in the current climate, it's a risky game to make any kind of prediction, bar assuming that economies around the world will recover in the whole with further smaller shocks and inconsistent sector by sector recoveries depending on market conditions and sentiments.

One thing is for certain, that we are living through history and are seeing times that will be discussed and hopefully learned from in the decades to come.

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