from a newsletter by Martin WeissjustjazzThe last two weeks were...

from a newsletter by Martin Weiss


justjazz

The last two weeks were among the worst for the U.S. bond market in recent memory. Long-term Treasury bond prices began tumbling on March 24th and have been mostly falling ever since.

Then, this past Friday, in response to the news from the labor department, bond prices suffered their WORST SINGLE-DAY DECLINE IN EIGHT YEARS!

Big banks and brokerage firms in the U.S. scrambled to dump their U.S. Treasury notes and bonds.

Central banks in Japan, China and other Asian countries, which had also loaded up on U.S. Treasury bonds recently, followed suit.

Everywhere, bond investors got clobbered with heavy losses.

By the time it was all over, the price on the longest-term Treasury bond plunged by more than 6 points in two weeks, the equivalent of about 600 points on the Dow. Interest rates, which invariably go up when bond prices fall, shot through the roof.

Long-term Treasury yields rose by nearly HALF of a full percent, driving up the interest rates on mortgage bonds, corporate bonds and municipal bonds.

Interest rates also surged in London, where investors had already been anticipating an official rate hike ... in Tokyo, where 10-year interest rates jumped to a five-month high ... in Paris and Frankfurt ... Hong Kong and Taipei ... Buenos Aires and São Paulo.

Suddenly and without warning, it seems the world's extended honeymoon with low interest rates is over, and a new period of rising rates has begun.