Bond Report: 30-year Treasury yield heads for biggest one-day jump since June 2022 after poor auction

by | Nov 9, 2023 | Stock Market

The 30-year Treasury rate headed for its biggest one-day jump in more than a year on Thursday after a government bond auction drew weaker- than-expected demand. What’s happening
The yield on the 2-year Treasury
advanced 2.5 basis points to 4.961% from 4.936% on Wednesday.

The yield on the 10-year Treasury
was up 8.3 basis points at 4.605% versus 4.522% Wednesday afternoon.

The yield on the 30-year Treasury
climbed up to 15 basis points to as high as 4.805% from 4.655% late Wednesday. If the size of that jump holds through the end of the New York session, it would be the largest one-day jump since June 13, 2022.

What’s driving markets Treasury’s auction of $24 billion in 30-year bonds Thursday afternoon went poorly, undermining investors’ hopes that demand would hold up for government debt. The weaker-than-expected sale triggered an aggressive selloff in the long-dated bond and sent U.S. stocks to New York session lows.

Meanwhile, in remarks prepared for an International Monetary Fund panel on Thursday, Federal Reserve Chairman Jerome Powell said the central bank is wary of “head fakes” from inflation. He also indicated that officials are not yet confident that interest rates are high enough to bring inflation down to 2% over time. His live remarks were interrupted and cut short by a climate-change protester. Data released earlier on Thursday showed that initial jobless claims dipped to 217,000 last week, remaining at low levels typical for a strong labor market. Economists had expected new claims to total 220,000.

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