At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread.

Swap rates are what companies, investors, and traders pay to exchange fixed interest payments for floating ones. That rate falling below Treasury yields—the spread between the two being negative—is illogical in the eyes of most market observers because it theoretically signals that traders view the credit of banks as superior to that of the U.S. government.

Back in 2009, it was only negative in the 30-year maturity, a temporary offshoot of de-leveraging and market swings following the credit crisis. These days, swap spreads are near or below zero across maturities.

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