Bonds: Treasury prices fell, with the yield on the benchmark 10-year bond rising to 3.71% – it’s highest since mid-November. It stood at 3.51% late Tuesday. Treasury prices and yields move in opposite directions.
Revisions/extensions (6:49 am 5/28/2009, steveegg) – I presume Shoebox ran out of time to explain why a high yield/low price on Treasuries is not exactly a good thing, so you’re left with the economic understudy to do the explaining. The CNNMoney blurb actually does a fair job of at least touching on that:
– The appetite for short-term (specifically in this case, 5-year) notes represents a lessening demand for longer-term notes (which explains the nearly-failed auction of 30-year notes the other week).
– Mortgage rates are tied to the 10-year yield, and rising interest rates could stifle any “recovery” in the housing market.
– The record amounts of debt coming to market could overwhelm it. Indeed, the Federal Reserve already is soaking up a lot of Treasury securities because there just isn’t enough money out there to buy it all.
