Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Treasurys: 10-year yield hits 4%

By Hibah Yousuf, staff reporter

NEW YORK (CNNMoney.com) -- The 10-year Treasury note yield rose to 4% Monday for the first time in 18 months, as reports continued to point to a strengthening economic rebound and traders braced for a major auction of Treasury bonds.

What prices are doing: The benchmark 10-year note fell 5/32 to 97, and its yield surged to 4%, an important psychological level, for the first time since October 2008, the height of the financial crisis. Bond prices and yields move in opposite directions.

Click chart for current prices and yields.

The 30-year bond fell 29/32 to 96-6/32, and its yield rose to 4.85% from 4.80% Friday.

The 2-year note edged down 2/32 to 99-7/32 and yielded 1.19%. The 5-year note fell 25/32 to 98-9/32 and yielded 2.74%.

Prices ended lower Friday, a holiday-shortened trading day, after the March jobs report showed the biggest increase in jobs in three years. The Labor Department said the economy gained 162,000 jobs during the month.

What's moving the market: Bond investors continued to react to the March jobs report, as well as a report on pending home sales that pointed to a stronger housing market.

The Institute of Supply Management's non-manufacturing index also contributed to the rise in yields. It climbed to 55.4 in March from 53 the previous month -- any reading over 50 signals expansion.

Yields rose as the Treasury gears up to auction $82 billion in debt this week. The sales will be closely watched after the last round of auctions worth $118 billion was met with lackluster demand.

Investors met the first of the auctions with strong demand. They bid $27.5 billion on $8 billion of reopened 10-year Treasury inflation-protected securities.

The Treasury will offer $40 billion in 4-year notes Tuesday, $21 billion in reopened 10-year notes Wednesday and $13 billion in existing 30-year bonds Thursday.

What analysts are saying: "A fairly positive employment report and upcoming supply have Treasurys back on their heels right now," said David Coard, head of fixed-income sales and trading at the Williams Capital Group.

He said the market's reaction to the jobs report suggests that investors think the economy is becoming self-sustaining and that the Federal Reserve might have to tighten monetary policy sooner rather than later.

The Federal Reserve's Board of Governors is meeting Monday to discuss the discount rate, which it raised a quarter of a percentage point to 0.75% in February.

With the 10-year yield crossing the 4% level, Coard said investors could remain optimistic about the strength of the economic recovery and continue to sell Treasurys. But he said some may perceive Treasurys to be more attractive and use the high yield as an entry point into the market.

"I'm in the camp of those who feel that it remains to be seen whether the economic growth we've seen in recent quarters is sustainable," Coard said. "With the fiscal stimulus winding down, we're entering a phase where the training wheels are coming off the economy. The question is will it topple or remain upright." To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.92%3.92%
15 yr fixed2.99%2.98%
5/1 ARM3.26%3.12%
30 yr refi4.01%3.98%
15 yr refi3.08%3.04%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,788.48 -10.01 -0.06%
Nasdaq 5,119.59 -7.94 -0.15%
S&P 500 2,088.30 -1.81 -0.09%
Treasuries 2.22 -0.01 -0.36%
Data as of 2:09pm ET
Company Price Change % Change
General Electric Co 30.17 -0.19 -0.61%
Bank of America Corp... 17.52 0.04 0.20%
Microsoft Corp 54.77 0.84 1.56%
Freeport-McMoRan Inc... 8.20 0.10 1.23%
Pfizer Inc 32.74 -0.05 -0.14%
Data as of 1:54pm ET


Yahoo stock has been a big loser this year. Some analysts and investors are wondering if time has come for Yahoo to get rid of Marissa Mayer and find a new CEO. More

December is chockablock with big financial news that is bound to move the markets. They range from momentous rate decisions at central banks to IMF's decision on China's currency. More

Yahoo stock has been a big loser this year. Some analysts and investors are wondering if time has come for Yahoo to get rid of Marissa Mayer and find a new CEO. More

Hive, a startup funded by the UN, is tasked with getting more Americans engaged with the refugee crisis. More

Shoppers around the country braved the crowds to get their hands on the best Black Friday deals. More