What does it mean when the treasury market rates....?

Question

go down basic points? is that a good thing to our economy or vice versa?.

same to if the treasury market rate increase basic points? is that a good thing or bad thing?

Answer 1

100 basis points = 1%.  The other respondent who called himself an economist is a donkey.

The Treasuries can indicate a number of things, and all of them are only relative to the overall market.  People will see what they want to see.  Usually if the Treasuries are going up, it means that it is getting more expensive to borrow money.  If they are going down, it is the opposite.

Recently (6 mos.) Treasuries touched 2.5%, but it was because the Treasuries were seen as a safe place to invest your money, not because it was a great yield. This is a big question that could have a fifty page response.  Remember that foreign nations and sovereign wealth funds are the primary holders of Treasuries (u.s.debt).  If the % rate is extremely different than the fed rate, it means that there is a corresponding lack or support of the country's ability to pay that debt.  And with our (American) massive debt, that is the most important note of all.

Answer 2

Do you mean basis points?  A basis point in a fund is .01% so 1% is equal to 100 basis points.  This is the interest rate that the fund is making.

When this goes down you can't determine if the economy is bad or good.  Heres some basic economics.  The decrease in points will allow companies to borrow money cheaper and be able to buy capital goods which theoretically create new jobs.  When it goes up it means the economy is overheating and needs to cool down.  Growing too fast causes problems as well (ie inflation).

Answer 3

first i gonna give a quick lesson in economics!

basis point is a fancy mancy phrase for percentage! 2 basis point = 2% !

when the us treasury rates goes down there is what we economist call cheap money! meaning

it is cheaper for the us to borrow money!

when the rates goes up then it become more expensive to borrow money!

why should we care??

because when the rates are low, all forms of interest become cheaper or lower!

for ex: credit cards, car loans, mortgages, etc!

so yes lower treasury market rates = good for Everyone!