Demand Falters at Two-Year Treasury Auction as Fed Bets Mount
- Fed's Yellen cites December meeting as `live possibility'
- Wednesday note sale's bid-to-cover is lowest since 2010
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Two-year Treasury yields reached the highest since 2011 as Federal Reserve Chair Janet Yellen said she sees the economy performing well, stoking speculation the central bank will raise its benchmark interest rate next month.
The Treasury’s sale of two-year notes on Wednesday drew the weakest demand for the issue since 2010. The results signal investors’ reluctance to hold the securities, the coupon maturity most sensitive to changes in Fed policy, weeks before the central bank may lift rates for the first time since 2006.