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US Treasury Yields Take a Tumble

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  • Description

    Mike McGervey of McGervey Wealth Management argues low Treasury yields will hurt the economy.

  • Duration 3:02
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710 year treasury yield sitting at record lows my next guest says -- because any lower we're gonna have some serious issues in the economy joining me now is Mike -- -- Who is -- president.

Up in the derby wealth management thanks so much for joining us I think that the direct quote that you have with the ten year treasuries nearly as lows again -- -- -- lower the global economy as a whole.

Would not be good shape the problem is you said that like five days ago and it's gotten lower since then so.

Are you worried are you nervous.

A good afternoon Melissa -- -- great question I think the a ten year treasury yields are great barometer we are seeing investors taking flight to quality.

There's a high demand for treasuries right now.

We also think it's a good indicator.

Of what the future holds are the prospects for economic growth both here in the US and abroad.

-- now that there is potentially of silver lining there aren't cost right now are extremely low which is great for business is.

It's good for potentially the housing market even the US government has yet why does it make you nervous I mean what you're you're saying it could portend terrible things to come what -- Well I suspect that it and as if we use the S&P as a reference point.

We've seen and I expect there -- impeded -- trade range bound but between the 1295 level.

In the thirteen 34 level from a technical perspective.

In it and obviously based on today it does not appear that we're gonna close above the thirteen 34 level.

What's moral being a month and month end being a significant close.

I suspect this may pushes down.

To challenge the twelve -- 1295 level again and -- the 1295 levels penetrated.

I would expect to see.

The next leg down be potentially 1237.

To 1205.

So big sell -- -- You know do you think what do you think the yield curve it do you think people are ignoring the yield curve because I remember in 2007.

When things were great we had an inverted yield curve and a lot of people were saying aspect could be a signal about things to come.

But they -- didn't want to believe -- because at the time.

Things were good and then all of a sudden we hadn't had this huge financial crisis -- do you think right now people are ignoring what the bond market is telling them.

But in all right I think the fact that they're going to the bond market and increasing.

Yields obviously increasing for -- decreasing yields increasing obviously the demand for treasuries.

Is some indication that investors are heating caution.

And I don't think it's necessarily a bad thing to be.

May be in the intermediate range of the yield curve right now -- with the government's accommodative policy.

To allow all rates to stay where they are presumably for the next two years.

You -- -- great -- about stocks is well you say that the way that may and is often dictates how the rest of the -- gonna go we went back and looked at the -- and that's definitely been true the last two years.

So do you think that will happen again that if we and -- in negative territory we continue down this happened the rest of the summer.

Is going to be negative for stock.

X I would think you would certainly increase the probability for more increased pressure on the downside.

OK my thanks much for coming on existing prospective.

Thanks Melissa.

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