Tags: US | Credit | Markets

Rates Fall Day After Bond Yields Hit 2010 Highs

Tuesday, 06 Apr 2010 02:35 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Interest rates fell Tuesday in the bond market, a day after yields reached their highest levels since October 2008.

The yield on the 10-year Treasury note fell to 3.98 percent in afternoon trading from 3.99 percent, a day after briefly climbing above 4 percent for the first time since June. The yield is now nearly as high as it was just before the credit crisis erupted late in 2008.

The price of the 10-year note maturing in February 2020 rose 3/32 to 97 5/32. The 10-year note yield is often used as a benchmark for interest rates on consumer loans.

The drop in yields comes as the government sold $40 billion in three-year notes. Prices slightly eased off their highs after the afternoon auction, which drew about the same demand as auctions for notes with similar maturities in recent months.

The bid-to-cover ratio, a measure of demand, was 3.10. It was 3.13 for $40 billion in three-year notes sold last month.

The yield on the three-year note maturing in March 2013 fell to 1.73 percent from 1.75 late Monday. Its price rose 1/32 to 98 31/32.

Tuesday's rise in bond prices was somewhat unusual because investors usually sell off Treasurys ahead of auctions in hopes of pushing yields higher. However, yields already trending higher in recent days, investors found enough value in the bond market to buy up Treasurys ahead of the auction.

Weak demand at recent auctions had been one of the primary reasons interest rates have climbed and bond prices have fallen in recent weeks. Mounting evidence that the economy is steadily recovering has also driven interest rates higher.

Investors are concerned about the record amount of debt the government has been issuing to help stimulate the economy leading to oversupply of bonds. A stronger economy can also lead to inflation, which would require the Fed to raise borrowing costs.

In other trading, the yield on the two-year note that matures in March 2012 fell to 1.16 percent from 1.18 percent. Its price rose 1/32 to 99 22/32.

The yield on 30-year bond that matures in February 2040 was unchanged at 4.84 percent. The price fell 7/32 to 96 13/32.

The yield on the three-month T-bill that matures July 1 rose to 0.17 percent from 0.16 percent.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved