Treasuries snap back as investors step in after 10-year yield hits 24-year high
TLT•U.S. Treasury bonds rallied after the 10-year yield hit 5.34%, its highest level in 24 years, then fell to 5.24%. The 2-year yield dropped 10 basis points to 4.78%.
1. Yields reverse course
Investor buying reversed an early Treasury selloff on Thursday, following a surge in long-term yields to their highest levels in 24 years. The 10-year yield fell to 5.24% after reaching 5.34%, while the 30-year yield was down 3 basis points at 5.60%.
2. Short-term debt leads rally
The strongest buying was in 2-year Treasuries, whose yield fell 10 basis points to 4.78%, its lowest in a week. Market expectations of a Federal Reserve rate hike at its meeting later in October fell to 72% from 88% earlier.
3. Investors await jobs data
The rally followed a sharp rise in yields over the past six weeks. Investors were waiting for Friday’s September nonfarm payrolls report and monitoring comments from Federal Reserve officials.
