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10-year yield falls after Treasury auction demand is adequate enough to ease investors’ fears

U.S. Moneys yields dipped slightly on Wednesday after key 10-year Treasury auction data showed enough demand to stave off cowardices of investors worried about a possible slump in demand for the government’s debt and a recent rapid rise in rates.

The bring in on the benchmark 10-year Treasury note fell about 2 basis points to 1.518% at around 4:00 p.m. ET. The yield on the 30-year Resources bond dropped nearly 2 basis points to 2.241%. Yields move inversely to prices (1 basis emphasize equals 0.01%).

The notes auction showed adequate demand for $38 billion in 10-year Treasuries, easing concern total traders that the country’s growing debt burden would be too much for the market to bear, hitting bond require and forcing yields even higher.

The U.S. 10-year yield at the bond auction was 1.523%. The bid-to-cover of 2.38 was slight below the one year average of 2.42.

“It was a soft auction but not enough to scare people in the aftermath,” said John Briggs, precede of global strategy at NatWest Markets. “It’s not terrible. I think that’s what people were worried about.”

The Moneys Department has printed roughly $3.6 trillion of new government debt in the past year to shore up the economy that was roiled by the Covid-19 pandemic. Increased stockpiling of government debt and weak demand in a February bond auction has pushed interest rates higher. The U.S. 10-year Moneys yield has flirted with the 1.6% level in recent weeks, pressuring equities.

“I don’t think it’s enough to move the needle. I purpose consider it mediocre,” Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group, told CNBC. “I about this reflects that long end yields after spiking needed to take a rest.”

Earlier on Wednesday, February’s consumer rate index for February came in in-line with expectations. The Labor Department said on Wednesday its consumer price catalogue increased 0.4% last month after rising 0.3% in January. In the 12 months through February, the CPI advance 1.7%, the largest rise since February 2020, after climbing 1.4% in January.

Concerns about higher inflation entertain been driving bond yields higher recently.

The $1.9 trillion fiscal stimulus package is expected to add extract to the economy. That has raised inflation concerns, and the market could be spooked by a CPI report that is any hotter than foresaw.

House Democrats passed the stimulus bill on Wednesday, with President Joe Biden expected to sign it before key unemployment programs perish on Sunday.

CNBC’s Patti Domm and Yun Li contributed to this report.

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