European debt crisis pushes rates lower
An auction of 2-year Treasurys sells for 0.769%, a record low, as many investors seek safety from stock market and currency volatility.
If nothing else, the European debt crisis is pushing U.S. interest rates substantially lower.
Today's evidence: a $42 billion auction of two-year Treasury notes produced a record-low yield of 0.769%.
The auction was accompanied by a drop in yields across the world of bonds. The 10-year Treasury yield was 3.16% at the end of the day, down from 3.23% on Monday and 3.66% on April 30.
That's great for homebuyers, if they want to buy. Bankrate.com put the national average rate for a 30-year fixed-rate at 4.87% today, close to the lowest rates of the year.
The rate on a four-year loan for a new car is 6.34%, down from 6.41% a week ago and 6.8% at the beginning of the year.
It's a disaster for savers. A six-month certificate of deposit earns 0.89%, down from 0.9% last week and 5.3% in July 2006.
Interest rates have declined as investors have sought safety and bought U.S. dollar and bonds.
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[BRIEFING.COM] The Federal Open Market Committee has just released its latest policy directive, which announced another $10 billion taper, lowering the pace of asset purchases to $15 billion per month. As expected, the Federal Reserve maintained the "considerable time" language in its forward guidance, suggesting the first rate hike remains somewhat distant. On that note, the economic projections that were also released indicate the Fed sees the fed funds rate at 1.375% at the end of 2015. ... More
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