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Negative Rates Have Arrived. Here’s What That Means For Investors.

The yields of some treasury bills fell below zero, suggesting that people who want to invest are still looking at safer assets in the wake of the market drop. The three-month yield has fallen to a record low, and the one-month yield is negative as well. This suggests that investors want to buy these bonds, and are willing to pay a higher price. However, the stock market as a whole continues to rise, and the market is safer now.

Key Takeaways:

  • Investors are paying a premium for the safety of these short-term bills.
  • Several European countries and Japan have similar government debt that pays negative rates.
  • A $2 trillion relief package is up for vote in the United States Senate.

“Yields on one-month and three-month U.S. Treasury bills dropped below zero today, signaling that investors are still seeking out safe assets like fixed-income government debt even as the market claws back some gains on hopes the massive $2 trillion economic relief bill may pass the Senate today.”

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