Treasury Yields Reach Two-Year High as Tapering Consensus Grows

Treasury 10-year-note yields reached the highest levels in two years on heightened speculation a strengthening U.S. economy will prompt the Federal Reserve to reduce its bond-buying program as soon as next month.

The biggest weekly increase in yields on the benchmark security in more than a month pushed the difference between two-year notes to the most since July 2011, suggesting investors are betting faster growth will lead to higher long-term borrowing rates. The Fed’s first step may be tapering monthly debt purchases in September by $10 billion to a $75 billion pace, according to the median estimate of economists in a survey concluded this week. The central bank will release minutes of its July 30-31 meeting on Aug. 21.