Treasury Real Yields Turn Positive as Inflation Slows

Treasury 10-year note yields exceeded the Federal Reserve’s preferred inflation gauge for the first time since 2011 as a report showed price increases slowed during the third quarter.

Yields on the benchmark debt traded close to a five-week high as Treasury sold $99 billion of notes this week. They fell yesterday as European-debt concern resurfaced after Spain’s jobless rate exceeded 25 percent. The Fed, in its last meeting before the Nov. 6 presidential election, retained its program of $40 billion in monthly purchases of mortgage-backed debt aimed at spurring the three-year economic expansion. A report Nov. 2 is forecast to show the U.S. added 125,000 jobs this month while the unemployment rate increased to 7.9 percent, according to economists in a Bloomberg News survey.