(April 15): A series of weak auctions for US Treasurys are stoking investors’ concerns that markets will struggle to absorb an incoming rush of government debt, the Wall Street Journal (WSJ) said.
A selloff sparked by a hotter-than-expected inflation report intensified this past week after lacklustre demand for a US$39 billion (RM186 billion) sale of 10-year Treasury. Investors also showed tepid interest in auctions for three-year and 30-year Treasuries, the report said.
Behind their caution lies a growing conviction that inflation isn’t fully tamed and that the Federal Reserve will leave interest rates at multidecade highs for months, if not years, to come. The 10-year yield — the benchmark for borrowing rates on everything from mortgages to corporate loans — finished the week around 4.5%, near its highest levels since touching 5% in October, said WSJ.
