Yields Rise to Highest Level in Over a Year

Julie C. Nichols General

CNBC – Reuters

U.S. Treasury’s yields surged to their highest levels in over a year on Tuesday and long-dated debt was on track for its worst monthly loss in over three years, as stocks gained.

The U.S. Treasury auctioned $35 billion of two-year notes at a high yield of 0.283 percent. The bid-to-cover ratio, an indicator of demand, was 3.04.

This auction was the first in $99 billion in new coupon-bearing supply coming this week. The Treasury will auction $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.

Selling accelerated as benchmark yields broke above technical support levels, and traders said fund managers were also selling mortgage-backed securities.

Yields have jumped since Federal Reserve Chairman Ben Bernanke said on Wednesday that the U.S. central bank may decide to pull back on its bond purchases in the coming few Fed policy meetings if data shows the economy is gaining steam.

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