Treasury 10- to 30-Year Yield Spread at Record on Fed Outlook
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Treasury 30-year bonds reached a record yield premium over 10-year notes amid speculation the Federal Reserve will concentrate on purchases of medium-term debt as it tries to keep down borrowing costs.
The longest maturities, the most sensitive to inflation expectations, also lagged behind shorter-term notes after the Fed said it’s prepared to ease monetary policy to spur the economy. Bank of America Merrill Lynch said Fed bond purchases would be an attack on the wrong problem. Ten-year notes fell before the U.S. sells $21 billion of them in the second of three sales of $66 billion of notes and bond this week.