Interest Rate on 30-Year Government Bond Auction Drops to Record Low

If you’re interested in refinancing your home, or buying something on credit, now’s the time to lock in long-term interest rates.

While 30-year interest rates have traded a bit lower, the U.S. government has never sold 30-year bonds at a lower interest rate than they did on Thursday, when the yield fell to 2.062%.

Those watching economic indicators will notice that the interest rate on 30-year Treasury bonds is now substantially below the annual inflation rate reported Wednesday of 2.5%.  After inflation, the 30-year bond buyer would lose about 0.44% per year in purchasing power.

Investors drove down interest rates as coronavirus infections and deaths continued to mount and disrupt global commerce. Equity markets remain near all-time highs, but it’s questionable how long they will stay at these levels if the virus continues to spread and keeps consumers locked indoors.

 

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