NEW YORK (CNNMoney.com) -- Treasury prices continued to surge Tuesday, pushing the 2-year note's yield to a record low and the 10-year note's yield below 3% for the first time since April 2009, as the looming expiration of Europe's bank lending program boosted demand for the safety of government debt.
What prices are doing: The benchmark 10-year note jumped 19/32 to 104-21/32 and its yield sank to 2.96% from 3.03% on Monday. Bond prices and yields move in opposite directions.
The 30-year bond climbed 1-10/32 to 107-26/32 with a yield of 3.93%. The 2-year note gained 2/32 to 100-2/32 and its yield was 0.61%. Earlier, the 2-year note's yield fell to 0.59%, a record low.
What's moving the market: The European Central Bank's year-long lending program to boost liquidity expires Thursday. As banks in the euro zone gear up to pay back €442 billion, investors are nervous that end of the program could further rock the financial system.
Because Treasurys are backed by the U.S. government, they are viewed as low-risk investments and are attractive during times of economic uncertainty.
What analysts are saying: "Treasury rates this low typically signal a real slowdown in economic activity, or even a recession," said Peter Cardillo, chief market strategist at Avalon Partners. "But I think this is a heightened fear factor and a flight to quality as opposed to any real economic meltdown."
He added that investors are concerned that when banks pay back the loans, the market will face another credit crunch.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.99%||4.00%|
|15 yr fixed||3.06%||3.10%|
|30 yr refi||3.99%||4.08%|
|15 yr refi||3.07%||3.18%|
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