Negative Rates Hit U.S.

Today we saw negative interest rates return to the U.S. The 6-Month T-Bill traded with a yield to maturity below zero for several hours this morning. See orange box. The negative yield transactions occurred at prices above 100.00 for the 6-Month Bill that matures September 24, 2020.

Just before 9:00 a.m., one enthusiastic purchaser locked-in a yield of -5 bps, or -0.05% for 6-months. The astute buyer paid 100.024 for a security that pays no interest and will mature at 100.000. He would have done better putting his Cash under his mattress!

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