SINGAPORE (Mar 6): The US bond market rallied strongly even as fear over the coronavirus outbreak is driving the stock market’s steep selloff. Treasury yields are falling to record-low levels on the back of investor flight to safety.

Yield on the 10-year Treasury, which is used as a benchmark for a wide range of lending rates, including for mortgages, auto, credit card and student loans, fell below 1%, for the first time ever. This time last year, yields were hovering around 2.7%, before the US Federal Reserve cut rates three times (totalling 0.75%) in 2H2019.

Last week, we wrote about how the Fed and Trump administration will do everything possible to extend the lifespan of what is now the longest economic expansion in the country’s history.

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