The 10-year treasury constant maturity rate over 2019 fell from a Max of 2.75 to a Min of 1.50 with an average of 2.15.
I want to check whether my understanding of what the figures and the 10-year treasury constant maturity rate is correct:
What it is:
An index that is based on the average yield of treasury securities, adjusted to be on an equivalent 10-year maturity. The constant maturity yields are determined by the Treasury using interpolation of the daily yield curve.
What the figures mean:
On a 10-year maturity basis, yields have been decreasing, and therefore bond prices are increasing. Obviously investors invest in bonds for different reasons and it becomes somewhat hypothetical as to what drives the increase, but two broad categories can be, interest rate expectations and credit quality expectations.
Since the yields have decreased and bond prices increased, one could take a view (not necessarily correctly) that investors think interest rates could be due to increase further.
Does this seem correct? Happy for any constructive corrections.