Bond Report: 2-year Treasury yield surges to 15-year high after U.K. gilts tank, weak auction

by | Sep 26, 2022 | Stock Market

Treasury yields surged Monday, with the 2-year rate jumping to a 15-year high after a surge in U.K. gilt rates and a poorly received U.S. auction.What’s happening
The yield on the 2-year Treasury note
jumped 10.3 basis points to 4.315%, its highest 3 p.m. ET level since Aug. 14, 2007, according to Dow Jones Market Data. Yields move in the opposite direction to prices.

The yield on the 10-year Treasury note
18.3 basis points to 3.878%, its highest since April 9, 2010.

The yield on the 30-year Treasury bond
was up 8.6 basis points at 3.697%, its highest since April 11, 2014.

What’s driving markets Global bond yields continued to move higher as the prospect of tighter monetary policy to combat inflation, along with fears in the U.K. about increased issuance to fund fiscal splurges, damped investor appetite for fixed-income assets.

A sale of $43 billion in 2-year notes met tepid demand, with some buyers able to pick up paper at a yield 1.4 basis points above the market price. The so-called tail was the largest since Feb. 2020. Bids exceeded supply by a ratio of 2.51 to one, larger than in last month’s sale but still be …

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