Demand at Treasurys auctions rose to record levels in 2012, bolstered by a global economy beset by shifting headwinds and Federal Reserve monetary stimulus that put downward pressure on yields.

The Treasury attracted $3.15 in bids for each dollar of the $2.153 trillion of notes and bonds sold this year, surpassing last year’s bid-to-cover ratio of 3.04 and the 2010 mark of 2.99. Demand increased even as Treasurys have returned 1.8 percent through yesterday, the smallest gain since 2009, when they lost 3.7 percent, according to the Bank of America Merrill Lynch U.S. Treasury Index.

Investors have clamored for the safety and liquidity of U.S. government debt with the U.S. economic recovery on shaky ground as President Barack Obama and Republicans in Congress approach a Dec. 31 deadline that could lead to the expiration of more than $600 billion in fiscal stimulus. European financial officials enter a fourth year of efforts to keep the region’s sovereign-debt crisis from spreading.

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“It’s clearly a combination of lackluster global economic prospects combined with the Fed’s decision to continue absorbing net Treasury supply,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. Investors have sought “what central banks are buying,” Lyngen said.

TIPS Auction

The Treasury sold $14 billion of five-year Treasury Inflation-Protected Securities Thursday, the seventh offering of coupon-bearing debt in eight trading days. This is the third consecutive year demand at government debt auctions will increase to a record.

The inflation-linked securities sold at a record-low yield of negative 1.496 percent. Holders of TIPS receive an adjustment to the principal value of their securities equal to the change in the consumer price index, in addition to a fixed rate of interest that’s smaller than the interest paid to a holder of conventional debt. The gap is known as the break-even rate.

Every maturity of note and bond offered by the government reached a record low auction yield during the year, as declines in the availability of safe assets led to increased demand at the sales.

The specific debt maturity generating the most demand this year was the two-year note, which averaged $3.79 in bids for each dollar of the $420 billion of the securities sold. The average yield on the two-year note in 2012 is 0.269 percent.

‘More Pessimistic’

“The market is waiting for more information about the fiscal cliff,” said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York, one of the 21 primary dealers that trade with the Fed. “The market is trading better because people are becoming more pessimistic that a deal will be reached.”

The government, which has run budget deficits of more than $1 trillion for the past four years, will reduce net sales by $250 billion in fiscal 2013 ending Sept. 30, from the $1.2 trillion of bills, notes and bonds issued in fiscal 2012, a survey of 19 primary dealers found.

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The central bank said Dec. 12 it will begin buying $45 billion of Treasurys a month next year in an expanded round of so-called quantitative easing. That followed a Sept. 13 announcement that it will buy $40 billion a month of mortgage securities.

Treasurys returned 9.8 percent last year and 5.9 percent in 2010, according to Bank of America Merrill Lynch data.