An auction of 2-year Treasury notes saw weak demand, pushing yields higher across the board. The 2-year Treasury note yield rose 2.5 basis points to 2.287%, according to Tradeweb data. The 10-year note yield was up 1.9 basis points to 2.845%, while the 30-year bond yield was mostly unchanged at 3.077%. Bond prices fall when yields rise. The auction “tailed” 0.4 basis points, a sign of diminished appetite. The tail is the gap between the highest yield the Treasury sold in the auction and the highest yield expected when the auction began – the “when issued” level. The 2-year note yield is sensitive to shifting expectations for monetary policy and has seen a relentless climb since September on rising expectations for a more aggressive Federal Reserve.
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