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In the past two weeks, we’ve had good news on the pandemic front. The second viral wave has continued to come under control, case growth is down significantly from the peak, and the case growth rate has returned to the lows seen in mid-June. Overall, despite the higher case counts, the pandemic is once more again control.

In response to the economic impact of COVID-19, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. On August 8, 2020, a presidential memorandum was signed to provide an extension of this relief through December 31, 2020. The CARES Act encompasses a number of provisions that offer relief for student loan borrowers. If you have a student loan, here’s what you need to know.

• Rates retreated a bit last week after increasing notably the previous week. The long end of the curve saw the largest declines, with the 10-year Treasury yield falling from 0.69 percent at the start of the week to 0.64 percent, while the 30-year dropped from 1.43 percent to 1.35 percent.

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• Last week’s heavy supply certainly affected the long end of the curve, as the 10-year Treasury yield moved from a historical low of 0.50 percent to 0.72 percent. (It opened at 0.69 percent on Monday.) The 30-year, which was at 1.18 percent last week, spiked and opened at 1.43 percent on Monday. The 30-year seems to have created a floor around 1.20 percent over the past five months, as it has not approached the historical low of 0.997 percent it set in March 2020. The 2-year, which opened the month at a steady 0.11 percent, backed up to 0.16 percent last week and opened at 0.14 percent on Monday.

Over the past two weeks, we’ve had some good news. It looks like the second wave of coronavirus infections has peaked and turned back down. Case growth is down significantly from the peak, and the case growth rate has returned to the lows seen in mid-June. In most states, the data indicates that outbreaks are being contained.

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• The 10-year Treasury yield reached another record low last Thursday of 0.50 percent before slowly increasing to 0.55 percent, where it opened Monday morning. The 2-year also reached a new low last week of 0.11 percent before opening on Monday at 0.12 percent. The 30-year remains well above its historic low yield, trading at 1.22 percent on Monday, and the 20-year is trading at 0.95 percent, slightly above its historical low. The large amount of new 10-year and 30-year supply this week could move rates higher.

​Strong July for markets

July marked a strong start to the second half of the year for markets, as all three major U.S. equity indices ended the month in positive territory. The Dow Jones Industrial Average (DJIA) gained 2.51 percent for the month, and the S&P 500 impressed with a 5.64 percent return. The Nasdaq Composite, with its heavy weighting to technology, was the leader, rising by 6.85 percent.

​This week, we had some progress on the pandemic front, as things started to improve after the stabilization we saw last week. Case growth peaked, at least in the short term, and the case growth rate ticked down. Further, outbreaks in many states are now being contained, as expected.

​General Market News            

• Treasury rates reached historical lows last week as the 10-year yield slid to 0.51 percent. The 30-year touched 1.20 percent, its lowest level since April, and the 2-year reached its new low of 0.10 percent on Monday. Poor gross domestic product (GDP) numbers from last week, combined with Federal Reserve (Fed) commentary on providing more support and the continued battle with COVID-19, had a hand in pushing rates (especially shorter-term rates) to new lows.

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• The 10-year Treasury yield fell to 0.55 percent last week, slightly above the historical low of 0.54 percent reached on March 9. It opened at 0.57 percent on Monday. The 2-year yield opened at 0.14 percent, and the 30-year yield opened at 1.21 percent. With short-term rates at or near all-time lows, a slowing economy, and continued coronavirus concerns, there will likely be new lows in Treasuries and mortgages in the days and weeks to come.