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Screenshot taken on 2/5/2011

As seen from the table, the rates have decreased whether you compare to yesterday, last week or last month. Does it mean that investors think that the US is going to be deflating?

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There's more demand for the bonds that are offered.

Beyond that, I don't know what to say based on three data points per bond over a month.

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  • +1 because yes more data needed to answer the actual question.
    – Apoorv
    Commented Jun 17, 2011 at 19:04
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Please keep in mind that QE2 is easing down and some of the current demand for treasuries is fueled by the FED itself. Since QE3 doesn't look like its likely to happen, although it still might, the buying demand may lesser or even turn on the market.

What this would do is similar to what is happening in SLV and other instruments where the price has run up to a point that its not realistic. I think in the end it would all depend on your perception of how "safe" the treasuries are and how real is the demand backing the current price spike (and the resulting yield fall).

From the governments point of view, they are issuing debt at lower interest rates than the current outstanding debt, allowing them to decrease the debt service fees as the bonds roll over. This is good for them and not so bad for investors since a 3.29% yield is still pretty damn good.

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