This won’t be much consolation when you lose your job, but the awful economic news coming out of Washington DC this morning is great news for owners of U.S. bonds, which rise when expectations of economic growth decline. The iShares Barclays 20+ Yr Treasury Bond Fund (ticker: TLT) is up more than 30 percent in the last year, and is up more than 1.5 percent this morning in pre-market trading.
Naturally, Twitter noticed:
As we've postulated since 2006: 10 year Treasuries to 1%, 30 year to 2%. We Are Japan. #WEAREJAPAN
— Scott Bleier (@CreateCapital) June 1, 2012
10 year treasuries yielding 1.51%….
— Robert Simons (@SorsTrade1) June 1, 2012
And US 10yr at an all time low too @Neil_Irwin: German 10y bonds down to 1.112%. Wow. We are all Japan.
— Nouriel Roubini (@Nouriel) June 1, 2012
US Gov ought to sell as much 30 year bonds as it can at these rates. Definitely lowers the overall cost of running the country.
— Jeff Hook (@jeffhook) June 1, 2012