Bonds’ Best Month Since March Faces ‘Sanity Check’ in Auction
- Monday’s 20-year bond auction falls into a potential vacuum
- Signs of slowing economic growth have boosted demand for bonds
The US Treasury building during a renovation in Washington, DC.
Photographer: Nathan Howard/BloombergThis article is for subscribers only.
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
Spurred by slowing inflation and signs of a cooling growth, traders and investors have recently rushed headlong into US government debt, convinced that the Federal Reserve is done raising interest rates and will shift to cutting them by the middle of next year. That’s ended a six-month losing streak for Treasuries and pushed the market to a gain of 2.6% in November. It’s the biggest advance since March, when there were fears that a banking crisis would sink the economy.