10-Year and 30-Year Rate Spread Falls Below 100

The 30-year is at 2.82% and the 10-year is 1.86% which is a 96 bip spread. When Chairman Bernanke announced Operation Twist nine days ago, the 30-year was at 3.25%. Thus, the 30-year has lost over 40 basis points since the announcement so the long end of the curve is coming down.

The last time the 10-30 spread was below 100 basis points was in July 2010, when the markets were falling into Deflation and Bernanke stepped in with QE2. Keystone's indicators show that we are currently in Disinflation.