10-year Bond Yield Drops Below 2%, a level not seen on a monthly closing basis since April 1950

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Treasuries rose, pushing 10-year note yields below 2 percent, as the government’s payrolls report showed no jobs were added in August, stoking speculation that the Federal Reserve may consider additional stimulus measures to boost the economy.

U.S. 30-year yields fell to the lowest in since January 2009 as U.S. employment data were the weakest reading since September 2010. Minutes of the Federal Reserve’s Aug. 9 meeting released on Aug. 30 showed policy makers will debate stimulus options at their September gathering. German government debt rallied and credit defaults swaps rose, reflecting concern the European debt crisis is worsening.

“The markets were expecting some positive rate of job growth, and with that not materializing, everyone wants the safety of Treasuries,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “The nonexistent job growth has decreased fear of inflation and replaced it with increased fear of recession.”

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Posted in * Culture-Watch, * Economics, Politics, Credit Markets, Economy, Federal Reserve, History, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government