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.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.97%||4.01%|
|15 yr fixed||3.13%||3.14%|
|30 yr refi||3.97%||4.05%|
|15 yr refi||3.19%||3.16%|
Today's featured rates:
Trading on Signet Jewelers halted on Tuesday morning following news that a massive class action lawsuit has been taken against Sterling Jewelers, which owns Kay Jewelers an Jared the Galleria of Jewelry and is itself a part of Signet. More
President Trump wants to increase defense spending to improve military readiness. But even without his proposed increase, the United States spends more on the military by far than any other country. More
Tom Wheeler, the former FCC chairman who became the cable industry's worst enemy, speaks out against the new FCC administration's actions. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More