Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

10-year yield sinks to 17-month low

By Blake Ellis, staff reporter

NEW YORK (CNNMoney.com) -- Treasury yields dropped to yearly lows Monday as fears about the global economic recovery continued to shake investor confidence.

What yields are doing: The yield on the 10-year note stood at 2.58% Monday after dropping to 2.57% in earlier trading, the lowest level since March 2009. On Friday, the 10-year yield fell to a 16-month low of 2.68%.

The yield on the 30-year bond hovered at the lowest level since April 2009, falling to 3.72% from 3.87% on Friday.

Meanwhile, the yield on the 2-year note closed at a record low, slipping to 0.49% from 0.54% Friday.

What's moving the market: "It's the same old story," said Peter Cardillo, chief market economist at Avalon Partners. "The bond market is worrying about a double-dip recession and deflation, with so many uncertainties and fears surrounding the global economy."

These fears worsened Monday after a report showed that China is poised to overtake Japan as the world's second-largest economy, with growth in Japan slowing sharply to 0.4% in the second quarter.

Meanwhile, in the U.S., the Empire Manufacturing index rose to 7.10 in August from 5.08 in July, while economists polled by Briefing.com had expected a jump to 7.5.

The National Association of Home Builders said its August index of builder confidence in the market for new single-family homes slipped to 13 points from 14 points in July. Economists had forecast the index to hold steady at 14 points, the lowest level since April 2009.

What analysts are saying: Until investors gain confidence in the global economy and are assured that a recovery is taking hold, yields could continue to slide, said Cardillo.

"For now, the strength of the bond market is there, and people are really worried," he said. "Until that fear factor is diminished it's not going to change, and yields could go even lower."

But as soon as the economy does show gradual signs of improvement, the bond market could quickly lose steam, he added.

"When the market realizes that these fears are not going to come to fruition, you could see a sharp reversal in the bond market," Cardillo said. "One of these days that's going to have to happen." To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.49%3.47%
15 yr fixed2.69%2.70%
5/1 ARM2.99%2.99%
30 yr refi3.49%3.49%
15 yr refi2.72%2.72%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 18,145.71 -16.64 -0.09%
Nasdaq 5,257.40 15.57 0.30%
S&P 500 2,141.16 -0.18 -0.01%
Treasuries 1.74 -0.01 -0.40%
Data as of 9:53pm ET
Company Price Change % Change
Reynolds American In... 53.78 6.61 14.01%
Chesapeake Energy Co... 6.68 -0.23 -3.33%
AT&T Inc 37.49 -1.16 -3.00%
Microsoft Corp 59.66 2.41 4.21%
Bank of America Corp... 16.67 0.11 0.66%
Data as of Oct 21


The combo brings together AT&T's wireless and Internet business and DirecTV with Time Warner programming, including CNN, HBO and Warner Bros. More

Passes for the new National Museum of African-American History and Culture in Washington D.C. are 'sold out' through March 2017. More

A Chinese firm that makes components for surveillance video cameras admits their technology was used, in part, to carry out Friday's cyberattack More

The University of Illinois partnered with Coursera to launch one of the most affordable online MBA programs yet. More