2 hrs ago
Strong 30-year Treasury Auction Eases Yields After Recent Selloff
The US government sells bonds to borrow money.
On Thursday, many investors wanted to buy its 30-year bonds, helping bond prices rise and yields fall.
The 10-year Treasury yield ended at 5.227%, down after reaching a 24-year high the day before.
But the bond market still faced worries about inflation and expensive oil.
Federal Reserve Governor Christopher Waller said interest rates may need to rise further, though the timing could be flexible.
Higher rates can make it more expensive for people and businesses to borrow.
Companies borrowing to build AI infrastructure may also add to pressure on rates.
US stock indexes had mixed results, with the Nasdaq and S&P 500 falling while the Dow edged up.
Treasury yields fell Thursday after strong demand at the government’s 30-year bond auction helped prices recover from recent selling.
The 30-year bonds sold at a 5.618% yield, below the rate expected when bidding closed; the bid-to-cover ratio was 2.54.
Federal Reserve Governor Christopher Waller said further rate increases would probably be needed to bring inflation to the Fed’s 2% target, while noting flexibility on timing.
Oil prices remained a concern: Brent settled up 3.7% at $103.92 a barrel, and US crude rose 3.4% to $91.17.
The Nasdaq fell 1.25% and the S&P 500 fell 0.47%, while the Dow gained 0.10%.
- Who
- US Treasury bond investors and the US government; Federal Reserve Governor Christopher Waller also commented on interest rates.
- What
- Strong demand at a 30-year Treasury auction helped Treasury yields retreat after a recent selloff.
- Where
- The US Treasury market.
- When
- Thursday, October 8; the 10-year yield had touched a 24-year high on Wednesday.
- Why
- The auction drew stronger-than-expected demand, while investors continued weighing inflation, oil prices, interest-rate expectations, and borrowing needs.
Further rate increases may be needed
Timing and longer-term expectations remain uncertain
Interest-rate outlook
Further rate increases may be needed
Federal Reserve Governor Christopher Waller said further rate increases would probably be needed to bring inflation to the Fed’s 2% target.
Timing and longer-term expectations remain uncertain
Waller also said there was flexibility over the pace of future increases. David Zervos said longer-term expectations for rates and inflation had not changed much.
Key facts
- 30-year auction yield
- 5.618%, below the rate expected when bidding closed
- Bid-to-cover ratio
- 2.54, compared with a 2.41 average across the previous six auctions
- Indirect bids
- 72.3% of the bonds offered, versus a 69.1% average across the previous six auctions
- 10-year Treasury yield
- 5.227%, down 5 basis points in afternoon trading
- 30-year Treasury yield
- 5.602%, down 5.9 basis points
- Two-year Treasury yield
- 4.751%, down 1.3 basis points
- Brent crude
- Settled 3.7% higher at $103.92 a barrel
- US stock indexes
- Dow rose 0.10%; S&P 500 fell 0.47%; Nasdaq fell 1.25%
Sources
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