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Treasuries Rout Extends With Fed Hike Looming, Five-Year Tops 2%

Published 03/14/2022, 01:20 PM
Updated 03/14/2022, 01:20 PM
© Bloomberg. The U.S. Treasury building in Washington, D.C., U.S., on Sunday, Dec. 19, 2021. The Treasury's top official for financial oversight said government regulators need action from lawmakers to adequately protect investors, and the wider financial system, from risks posed by stablecoins. Photographer: Samuel Corum/Bloomberg

© Bloomberg. The U.S. Treasury building in Washington, D.C., U.S., on Sunday, Dec. 19, 2021. The Treasury's top official for financial oversight said government regulators need action from lawmakers to adequately protect investors, and the wider financial system, from risks posed by stablecoins. Photographer: Samuel Corum/Bloomberg

(Bloomberg) -- Treasuries fell Monday to extend a severe selloff that last week delivered losses equivalent to their interest payments over the past year. 

Five-year yields rose six basis points to surpass 2% for the first time since May 2019, while 10-year yields climbed a similar amount to 2.05%. 

Yields across the curve are at or near multi-year highs thanks to accelerating inflation and an imminent global shift toward restrictive monetary policy. 

The 30-year breakeven rate -- a bond-market gauge of inflation expectations -- hit 2.60% last week, the highest since 2013. Swaps traders are certain the Federal Reserve will raise interest rates 25 basis points this week and see better than 80% odds it hikes borrowing costs at each of the six subsequent meetings scheduled this year. 

 

©2022 Bloomberg L.P.

© Bloomberg. The U.S. Treasury building in Washington, D.C., U.S., on Sunday, Dec. 19, 2021. The Treasury's top official for financial oversight said government regulators need action from lawmakers to adequately protect investors, and the wider financial system, from risks posed by stablecoins. Photographer: Samuel Corum/Bloomberg

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