Investors rushed into the safety of bonds Thursday and sold stocks, as it appeared the trade war could be prolonged and more painful for the world economy than expected.
Treasury yields fell sharply, as the futures market priced in higher expectations for fed rate cuts.
Investors rushed into the safety of bonds Thursday and dumped stocks, as it appeared the trade war could be prolonged and more painful for the world economy than expected.Treasury yield dropping about 8 basis points in its biggest one-day move since April 1. At the same, traders in fed funds futures bet on the Fed making two quarter-point rate cuts by the middle of next year and possibly a third in the second half of 2020.
The 10-year yield fell below that of the 1-year for the second time this year. The so-called inverted yield curve has been a reliable sign of a recession if the move is sustained. The U.S. market was also following Europe's bond market. The German bund slipped to a low yield of negative 0.12%, reflecting concerns about the European parliamentary vote.that the Trump administration is prepared to slap tariffs on another $300 billion in Chinese goods, as no new talks are scheduled.
Later, around 3:50 p.m., President Donald Trump said he thinks things will probably happen fast with China.Though vague, that appeared to help lift stocks, while yields moved off lows.
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