The Nation
Two-year bonds at record low rate
Posted: Oct 26, 2010 11:47 AM by Greg Boyce
Updated: Oct 26, 2010 12:45 PM
NEW YORK (AP) - Investors are lending money to the government at a record low rate for two-year debt.
The Treasury sold $35 billion in two-year notes on Tuesday at 0.40 percent, the lowest yield ever for an auction of two-year notes. Last month, the Treasury auctioned the notes at 0.44 percent, the previous record low rate.
The two-year auction comes a day after the Treasury sold inflation-protected bonds at a negative yield, a first since the government introduced the bonds in 1997.
Treasury yields have sunk to historic lows as traders expect the Federal Reserve will launch a new round of bond buying after its meeting next month. TIPS buyers are betting the Fed's action will stoke inflation, turning the bonds' negative yields into positive gains.
As Seen On News 5
