Skip to comments.Treasury yields soar
Posted on 06/10/2009 11:22:41 AM PDT by mathprof
Government debt prices tumble as new debt is prepped for auction and Russia says it will sell some of its holdings.
Treasury yields soared to seven-month highs Wednesday as the government prepared to sell $19 billion in 10-year notes and Russia said it would reduce its share of U.S. debt.
The benchmark 10-year note fell 17/32 to 93-16/32, and its yield surged to 3.93% from 3.86% late Tuesday. The yield was at its highest levels since settling Nov. 3 at 3.96%.
Bond prices and yields move in opposite directions.
The 2-year note dipped 1/32 to 99-4/32, and its yield rose to 1.33%. The yield on the 3-month note held steady at 0.18%.
The 30-year bond sank 1-5/32 to 92-11/32, and its yield jumped to 4.73% from 4.65%.
Earlier in the session, the yield on the longbond reached as high as 4.73%. The last time the 30-year bond settled this high was nearly a year ago on June 19, 2008, when the yield ended the session at 4.76%.
Debt sale: The government continued to sell large amounts of debt to fund the stimulus aimed at boosting the economy.
(Excerpt) Read more at money.cnn.com ...
Do you think if Obama would accuse foreign investors, such as China, of being greedy that they would take kindly to it? Like accepting lower interest rates so that 'the one' could continue out of control borrow/spend?
No! I didn't think so.
“What, specifically, will happen when our debt isn’t purchased by anyone?”
It will be purchased, it’s just that it will be expensive.
Unfortunately, the Treasury will be purchasing it more and more
That’s what I’m wondering about. I just recently refinanced my mortgage at 4.5% for 30 years. I was wondering what would happen to the financial industry if all of a sudden interest rates jumped to 10-15-20% per year...You would have a major crisis and uprising if the government allowed inflation indexing of mortgages like many other countries do (3rd world countries...that is). Growing up in Brazil during my childhood, I remember inflation rate exceeding savings rates....People purchased goods as soon as they received their paycheck...People threw their money at real estate, even cars for investments.
where should i dump my liquid savings to keep up once inflation hits? (i need it liquid seeing i don’t qualify for unemployment)
but what exactly will happen? ————Bwaney will have Fannie buy it-—with an IOU...??? LOL
I had been looking at buying a smaller house, but the offer we made in Feb fell through. We have looked at building a house on a lot, but I was expecting in April to have until August to get a low interest rate. I hadn’t expected rates to go up this much in just 6 weeks.
We haven’t quite yet settled on a floor plan, so it may go up enough to put us out of the market...at the rate it is going, 7% or more by late July?
IIR, the Treasury took steps in April to drive rates down - namely, they printed an extra 1,000 Billion dollars.
They were boasting about their success - but now rates are up almost a percentage point in 6 weeks?
How are those house sales and refinancings doing now...
Chinese purchasers of the notes are citizens of the world whose good deeds are countless and before whom we poor, miserable, unreformed former capitalists should prostrate ourselves in trembling gratitude that they have graciously consented to finance the One's remaking of society.
let me know if you get an answer, I need to know too.
let me know if you get an answer, I need to know too.
Over half have fallen through.
Yealds didn’t sour, bring on the 18-20% interest rates that we enjoyed under Carter!!!
“The bidders at these Treasury auctions are nothing more than greedy speculators who put their private interest above the public good.”
Shove your public good where the sun doesn’t shine.
Are you defending people who are so selfish as to work hard, lead a life of thrift, educate their children and try to save for their own retirement?
no answers... but this is a pretty good, concise explanation of the problem:
scary graph too.
“With an increased trust in the overall banking system, the panic demand for money has begun to and should continue to recede. The dramatic drop in output and employment in the U.S. economy will also reduce the demand for money. Reduced demand for money combined with rapid growth in money is a surefire recipe for inflation and higher interest rates. The higher interest rates themselves will also further reduce the demand for money, thereby exacerbating inflationary pressures. It’s a catch-22.
“It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.”
If they can screw the bondholders with impunity, do you really think that "unfair" fixed mortgage is safe. Ya'll be havin thirld world acorns demonstratin in front o yo 3 car garage.
Does this mean that interest rates on CD’s will also go up? Thanks.
everything points to gold...
my hesitation is that i don’t want to be the one who bought gold at ‘81 prices and has to hold it for 30 years. but i guess all signs are pointing to mid 70s, not early 80s, even though gold is breaking $1000/oz.
When I downsized houses, I pulled out $200 grand @ 5% for 30 yr. I plan to pay it back with Baraqqi minibucks.