Treasury Market Summary

Treasury Market Summary: the FOMC was a non-event, as expected, but it was anything but for the financial markets. Treasuries rallied as demand for risk slumped. The 10-year rate broke below 1.0%, albeit briefly, for the first time in three weeks. Wall Street saw red, with declines of -2.61% on the NASDAQ, -2.57% on the S&P 500, and -2.05% on the Dow. Stocks have been priced for perfection with the major indexes hitting new peaks in recent sessions, but investors have become more circumspect as the second wave of the virus and more stringent lockdowns have weighed on growth outlooks, as has the bumpy vaccine rollouts. And now the optimism over the $1.9 tln stimulus package been shaken by the likelihood it will have to be trimmed measurably, and will probably be delayed until at least mid-March. Those overshadowed a preponderance of good earnings news. Meanwhile, dovish indications out of the ECB, that the markets are underappreciating the chances for rate cuts, added to the richening in yields. The disappointing durables report added to the more bullish tone in bonds. View the summary.