Economy8 hours ago (Jul 26, 2021 12:54PM ET)
© Reuters. U.S. Real Yields Fall to Record Low Amid Growth Concerns
(Bloomberg) — The real yield on U.S. 10-year debt fell to a record low as concerns mounted over the outlook for economic growth.
The rate, which strips out inflation, fell almost six basis points to minus -1.269%. The move was compounded by a lack of trading liquidity, with the 10-year breakeven rate — a market proxy for the average annual rate of consumer prices over the next decade — edging higher at 2.36%.
Still, it points to souring investor sentiment amid the rapid spread of the delta variant that threatens to derail the economic recovery. And it comes as investors piled into haven assets after a surprise hit to Germany’s business confidence.
“We are in a regime of growth deceleration in the U.S., as the recovery becomes more mature and broad based, at the same time as inflationary pressures build,” said Peter Chatwell, head of multi-asset strategy at Mizuho International Plc.
U.S. stocks started the week on shaky ground, with the swinging between gains and losses as investors assessed the outlook for growth in a week full of corporate earnings.
Market jitters are also building ahead of Wednesday’s Federal Reserve decision, when officials will discuss the outlook for further monetary stimulus. Traders are slas