Interest rates are surging in the bond market after a government debt auction drew only tepid demand for second day.
The disappointing turnout Wednesday for the Treasury Department's $42 billion auction of five-year notes is raising the prospect that investors' appetite could be waning for government debt. If demand for debt drops, the government would be forced to pay higher interest rates to attract investors.
The drop in prices has sent yields charging higher. The yield on the five-year note rose to 2.59 percent from 2.42 percent. Its price fell 21/32 to 99 4/32.
The yield also soared on the benchmark 10-year Treasury note maturing in February 2020. Its yield is tied to many consumer loans.
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