Stocks at session lows as 10-year yield falls below 1 percent

CNBC's Rick Santelli reports how the bond market is doing after stocks fall to session lows as the 10-year yield falls below 1 percent.

The 10-year Treasury yield broke below 1% for the first time ever in the wake of an emergency rate cut by the Federal Reserve to combat the economic effects of the spreading coronavirus.

The yield on the benchmark 10-year Treasury note fell more than 11 basis points to an all-time low of 0.906%. The yield on the 30-year Treasury bond was also at a record low of 1.601%.

To offset the potential economic fallout from the coronavirus, the Fed slashed interest rates by half a percentage point on Tuesday in between its policy meetings, the first such emergency cut since the financial crisis.

While the move by the central bank was widely expected at some point, Tuesday’s reduction at 10 a.m. still caught traders by surprise, sending them into bonds. The Fed was scheduled to next decide on rates on March 18.

“The coronavirus poses evolving risks to economic activity,” the Fed said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.”

Fed Chair Jerome Powell said at a news conference later that the committee saw “a risk to the economy and chose to act.”

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