Long-term interest rates in the U.S. have tumbled to lows never seen before as concerns about the economic impact of the coronavirus outbreak mount. And the Federal Reserve may cut short-term rates more in the coming months. What’s an investor to do?
The yield on the 10-year Treasury dipped below 0.7% for the first time on Friday. Rates are falling as investors buy bonds and push up their prices – which move in the opposite direction of yields – as they hunt for “safer” places to put their money. The deadly coronavirus, investors warn, could strangle supply chains and keep shoppers at home. If that worry plays out, it will shrink economic growth and corporate profits, putting a hoped-for global recovery on hold.