10-year Treasury yield below 3%

By Hibah Yousuf, staff reporter


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.

file.png

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.

The mounting fears are pressuring the euro and world markets, and increasing the appeal of safe-haven assets including Treasurys.

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.

"The market is now set for a major reversal that could happen at any time," he said. "But if this grossly exaggerated fear factor continues, yields could go lower."  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.40%4.29%
15 yr fixed3.81%3.72%
5/1 ARM4.19%4.06%
30 yr refi4.36%4.26%
15 yr refi3.79%3.69%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 24,600.24 -64.65 -0.26%
Nasdaq 7,203.88 -34.18 -0.47%
S&P 500 2,686.16 -6.97 -0.26%
Treasuries 2.94 0.02 0.82%
Data as of 10:37am ET
Company Price Change % Change
General Electric Co 14.61 0.62 4.43%
Apple Inc 167.22 -5.59 -3.23%
Bank of America Corp... 30.34 0.16 0.55%
Advanced Micro Devic... 10.00 -0.11 -1.09%
Micron Technology In... 51.27 -0.15 -0.29%
Data as of 10:22am ET

Sections

US regulators are close to slapping Wells Fargo with a $1 billion fine for forcing customers into car insurance and charging mortgage borrowers unfair fees. More

Ads from over 300 companies and organizations ran on YouTube channels promoting white nationalists, Nazis, pedophilia, conspiracy theories and North Korean propaganda, a CNN investigation has found. More

A plan that lowers your student loan payments and offers some forgiveness isn't always the best choice. More