The 10 Year Treasury yield this morning is 2.35%. It was 3.04% earlier this year and 4% in 2010. In a healthy growing economy with GDP supposedly exceeding 4%, and real inflation running at 5%, would the 10 Year Treasury be trading at 2008 financial crisis levels? Of course not.

If Obama and his minions, touting our growing economy and millions of “new” jobs one month before the mid-term elections, are telling the truth than why have rates plunged from 3.04% to 2.35% since the beginning of this year? This is while the Fed has been tapering their QE heroine injections. When 10 year rates fall by 23% in nine months it is signaling trouble ahead.

HOW LOW CAN WE GO?

Chart of the Day

For some perspective on all-important long-term interest rates, today’s chart illustrates the 30-year trend of the 10-year Treasury bond yield (thick blue line). As today’s chart illustrates, the 10-year Treasury bond yield has moved within the confines of a 28-year downward sloping trend channel. Since 2008, the trend channel has narrowed slightly (see dashed gray lines). The recent spate of economic concerns (Europe, China, etc.) and geopolitical issues (ISIL, Ukraine, etc.) has encouraged a flight to safety resulting in a decline of the 10-year Treasury bond yield over the past ten months. In fact, the 10-year yield is currently at a level similar to what occurred during the height of the financial crisis in late 2008.