Mar 13, 2020 - Economy

Quantitative easing's return sends bond yields soaring

Data:; Chart: Axios Visuals
Data:; Chart: Axios Visuals

Longer-dated U.S. Treasury yields have bounced higher in recent days, with the benchmark 10-year note fully reversing course and rising to more than double its lowest level on Tuesday.

What's happening: The announcement of $1.5 trillion in repo injections on Thursday by the New York Fed followed two announcements about increasing the amount of cash it was injecting in its repo operations this week. The deluge has given yields a significant bounce.

  • Just this week the Fed has raised the amount of money it is pumping into the market daily from $100 billion to $150 billion and then to $175 billion, to go along with $45 billion in two-week operations and $60 billion in purchases for a "range of maturities."
  • "It looks like QE (quantitative easing)," Priya Misra, head of global rates strategy at TD Securities, told Reuters. "It is QE."

By the numbers: Yields on the 10-year Treasury note rose as high as 0.91% Thursday, 60 basis points higher than the low touched on Monday. Yields on the 30-year bond similarly jumped, touching a high of 1.50%, up 80 basis points from Monday's low of 0.70%.

  • Both Monday levels were record lows.

Go deeper: Record low U.S. Treasury yields are expected to keep falling

Go deeper