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U.S. Treasury yields rose on Wednesday as investors assessed how they would absorb the surge of debt supply after the Treasury Department raised the size of its longer-term bond auctions, along with a new 20-year maturity.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, 0.709% climbed 5.6 points to 0.713%, while the 2-year note rate TMUBMUSD02Y, 0.184% was virtually flat at 0.192%. The 30-year bond yield TMUBMUSD30Y, 1.403% surged 6.4 basis points to 1.394%. Bond prices move inversely to yields.
What’s driving Treasurys?
The Treasury Department said it would increase the size of all of its debt auctions to finance fiscal stimulus measures cushioning the blow of the COVID-19 pandemic. While the initial increases in financing this year were focused on shorter-term bills, the Treasury moved to shift financing to longer-dated securities over the coming quarters. The bulge of issuance expected in the coming months weighed on trading for government paper, pushing prices lower and yields higher.
