Rescue Pledge Triggers Biggest Treasury Bond Rout Since 1982
- Promise of $1.2 trillion fiscal plan boosts long-term yields
- Government needs to act ‘to avoid a depression,’ says BMO Hill
A pedestrian walks near the U.S. Treasury building in Washington, D.C., on March 17.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
The Treasury market buckled Tuesday at the prospect of a flood of U.S. spending to fend off an economic nightmare.
Yields at the long end of the curve shot higher on Treasury Secretary Steve Mnuchin’s proposal for a $1.2 trillion stimulus package. Rates on 10- and 30-year bonds shot up more than 36 basis points, their biggest one-day increases since 1982, while an iShares ETF tracking Treasuries maturing in 20 or more years sank a record 6.7%. The U.S. 10-year yield, the world’s borrowing benchmark, is now more than 70 basis points above the record low set last week.