US Treasuries Slide as Inflation Woes Lead to a Weak Auction
The US Treasury building in Washington, DC.
Photographer: Al Drago/BloombergUS Treasuries sank after investors spurned an auction of two-year notes amid concern that a potentially protracted war in the Middle East will lead to an oil-driven resurgence in inflation.
The losses on Tuesday came as a $69 billion sale of two-year notes drew unexpectedly weak demand, and as the Wall Street Journal reported that the US is planning to deploy about 3,000 troops to the Middle East. Two-year yields rose by as much as 10 basis points to 3.96%, leading yields on all maturities higher as oil prices advanced.