Of perhaps more interest is the fact that bond yields in the United States have fallen by over 100 basis points since mid-year to levels not seen since the 1950s. This suggests a very high degree of risk aversion on the part of investors, as does the fact that the spread over treasuries for many well-known corporate borrowers has widened appreciably.
Not surprisingly, yield curves, which in mid-year had indicated an expectation of future tightening of monetary policy in most countries, have gradually moved to showing either no tightening or an easing. In the United States, events have unfolded even further, with the Fed reducing the Fed Funds rate by 50 basis points last week.