The 10-year Treasury yield sank once again on Friday, falling to a new record low amid increasing coronavirus contagion panic and how that will translate to the global economy.

“We are asking the American public to work with us to prepare for the expectation that this could be bad,” a top CDC officials told reporters in a conference call outlining what schools and businesses will likely need to do if the COVID-19 virus starts to spread throughout the U.S.

The yield on the benchmark 10-year Treasury note, which moves opposite price, has dropped to 1.162%. A similar fate befell the yield on the 30-year Treasury bond also dropped to 1.67%, near its record low.

With the coronavirus on the cusp of becoming pandemic, according to World Health Organization experts, the Fed, which has stood on the sidelines, but claims it is monitoring the activity related to markets and the virus, may need to step in, according to experts.

“Expectations the Fed will be forced to cut relatively soon are leading to a re-resteepening impulse,” Ian Lyngen, BMO’s head of U.S. rates, said in a note on Wednesday.

The fed funds futures market is targeting a near 60% chance of a rate cut at the Fed’s April policy meeting, according to the CME FedWatch Tool. Traders also see the possibility of three additional rate cuts this year.

Aside from one day in the summer of 2016 when rates hit 3.34% before launching significantly higher that autumn, it has been since 2012 that rates were this low. While rates typically follow the 10-year yield, there are certain market factors that keep rates treading water above a certain level.

“When rates fall this quickly, it’s not so much that big banks draw the line on mortgage rates, but rather, the underlying Mortgage Backed Securities (MBS) market refuses to improve as quickly as the Treasury market,” said Graham. “Both mortgages and Treasuries are feeling the impact of coronavirus panic. That’s pushing rates lower. But mortgages also become less valuable to investors if they get paid off too quickly.”

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