The benchmark United States Treasuries turned in one of the most volatile weeks in recent history this past week.

Over an astounding 3-day period in mid-week, the yield on the ten year treasury first dropped 11 basis points from Monday to Tuesday then gained 12 basis points on Wednesday and added another 16 basis points on Thursday. The 30-year treasury over the same period dropped 13 bps, increased 18 and then added 13.

Prices for these securities, which move inversely to yield, dropped 10% from their highs for the week. A move of this magnitude is highly unusual in the normally staid market for government securities.

Corporate Bond Prices Noteworthy

The spread between investment grade corporate bonds and Treasuries narrowed substantially. Yield on the A-rated 20-year corporate bond dropped from 6.18% one week ago to 6.12% at the end of this week. The 20-year treasury during the same period moved from 3.65% on January 23 to 3.86% on January 30.

The resultant spread to Treasuries for the 20-year corporate decreased by 27 basis points for the week. While the spread is still near historic highs, the improvement should provide some cheer to the corporate bond issuers who have either been completely locked out of the credit market or have had to pay high rates to secure the capital needed for their operations or growth.

Several other developments were noteworthy this past week. Jobless claims rose for the fifth straight month for the first time in history. The 2.6 million figure for job losses in 2008 was the highest since 1945.

The U.S. monetary base doubled in 2008 as a result of the intervention of the Federal Reserve Bank. Most of the growth occurred in the last 4 months of the year, during which time supply increased at an annualized rate of 618%.

On Tuesday, the Fed decided to keep interest rates close to zero. The bank further announced that it would be expanding its support of the mortgage backed securities and consumer loan markets and would likely be purchasing long treasuries in the coming months.

At least one member of the Federal Reserve dissented on the basis that it was not productive for the fed to favor one sector of the credit market over another.

Economic reports released during the week showed continued slowness in existing and new home sales and durable goods orders. Consumer confidence and the Michigan sentiment were both more negative than forecast, and the GDP declined by 3.8%, one of the largest drops on record.

For the coming week, reports on retail sales, savings rates and wholesale inventories will dominate the market.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.