Photo: Library of Congress
The rate at which the U.S. government pays to borrow hit its lowest level ever at multiple maturities, after the Treasury auctioned $35 billion in two-year notes.Those notes yielded a record low of 0.220 per cent, and the auction saw a bid-to-cover ratio of 4.0, which reflects the second-highest demand for such bonds ever, according to Bloomberg.
Yields on the 10-year fell below 1.3925 per cent, yields on five-year Treasuries fell to 0.541 per cent, and yields on 30-year bonds fell to 2.46 per cent.
This is new evidence of a trend we’ve been seeing a lot recently—the flight to safe assets.
Economists continue to wonder how far yields may fall before demand for Treasuries declines and rates go back up.
If the last few hours have been any indication—and the negative yields on some European bonds are any indication—then this trend has further to run.