Treasuries See U.S. Falling Over Cliff as Yields Converge

From Bloomberg: Yields on 10-year Treasuries dropped the most in one day since May to 1.62 percent after Obama’s re-election Nov. 6. A figure below 1.7 percent indicates that investors expect gross domestic product to shrink by 0.3 percent next year as the so- called fiscal cliff takes effect, according to JPMorgan Chase & Co. Rates on longer-term Treasuries have converged with those of non-U.S. government bonds globally, after remaining about 1 percentage point above them in 2011.

While the economy is creating jobs, housing prices are recovering and consumer confidence is the highest in five years, bond investors are seeking safety from a possible downturn next year. Yields dropped to a two-month low on the prospect of a divided Congress stalling any budget deal and impeding the recovery from the worst recession since the Great Depression….

Read more at http://www.bloomberg.com/news/2012-11-13/treasuries-see-u-s-over-cliff-as-yields-converge-correct-.html