Bonds Show Investors Don’t See Risk of U.S. Fiscal Crisis
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As the political debate over budget cuts in Washington threatens to bring the government to a partial shutdown, bond markets are showing little concern about the nation’s fiscal health.
Yields on two-year Treasury securities fell one basis point to 0.82 percent at 9:07 a.m. in New York, below the average yield of 2.59 percent in the last decade, according to Bloomberg Bond Trader prices. Bond prices reflect expectations that lawmakers will resolve differences over the budget and avoid a crisis of confidence in U.S. assets, said John Lonski, chief economist at Moody’s Capital Markets Group.