As the S&P 500 Index (SPY; top chart) weakened through October, we saw the traditional flight to quality among 10-year Treasury notes, which hit a low yield of 3.4% on the 8th. Since that time, stocks have made harrowing new lows, but Treasury yields have soared, as investors have sold them off as well. Perhaps, amidst the glut of borrowing the U.S. will have to undertake and the state of the U.S. economy, Treasuries are losing their luster as a safe haven. That would not bode well for interest rates in general, including mortgage rates--and that would not be good for an economic rebound.
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