TREASURY NOTES: Panic Attack Mode?

By Staff Reporters

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Treasury notes are typically considered one of the world’s safest safe-haven assets—the US has always repaid bondholders on their investment, plus yield (interest). That’s why you can usually count on the bond market to rally when the stock market craters. And, vice-versa. But not this time:

  • The benchmark 10-year bond yield, which moves inversely to bond prices, had its steepest spike this week since the 2008 financial crisis. The 10-year yield is more closely watched than the 30-year yield (which also spiked) in part because it influences home and auto loan rates.
  • A Treasury auction of 3-year bonds on Tuesday was met with the softest demand since December 2023. That helped drive the bond sell-off on fears of a pullback among international investors, who hold $8.5 trillion in US Treasuries (Japan and China lead the pack).

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