datoid

The 10-Year Treasury yield dropped to 13.39% on Nov 9, 1981—a massive 4.4 standard deviation decline below its 60-day average of 15.12%. This represents the steepest yield compression in months during a period of extreme monetary tightening. The drop occurred amid contradictory economic signals: unemployment hit a record low of 4.30% while inflation (CPI) reached record highs. This unusual combination suggests markets may be pricing in either recession expectations or peak Fed hawkishness. What's striking is how bond markets moved so dramatically despite persistent inflationary pressure—typically yields and inflation move together.