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Long Term Perspective
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The wider spread between the risk-free Treasury bond and the AAA corporate bond in the past year does not suggest a worsening of credit conditions. Rather, it reflects the reduced supply of Treasury securities as the federal government recorded its second straight federal budget surplus. This puts a lid on Treasury security yields.
Short Term Perspective
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Long bond yields remain remarkably stable from August to November.
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2-year Treasury Yield & Spread to Fed Funds
30-year Treasury Yield & Spread 30-year less 2-year
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Yield Spread: AAA Corporate vs. 30-year Treasury
Yield Spread: Baa Corporate vs. 30-year Treasury
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Yield Spread: Bond Buyer vs. 30-year Treasury
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