Treasuries Stall After Flunking Test of Demand for Lower Yields
- Interest was weaker than expected for the 20-year bond sale
- Recently volatile market conditions also sidelined buyers
The U.S. Treasury Department building in Washington, D.C.
Photographer: Stefani Reynolds/BloombergThis article is for subscribers only.
The Treasury market failed a key test for its lower yield levels Wednesday as an auction of 20-year bonds fared poorly, despite cheapening into the bidding deadline.
The rally that drove long-term Treasury yields to five-month lows this week remained stalled after the auction, with the benchmark 10-year note’s yield more than six basis points higher on the day. At about 1.29%, the yield was more than 25 basis points higher than its low on Tuesday, when the prospect of prolonged economic stagnation caused by the spread of virus variants boosted appeal for haven assets.