Treasuries bond "bubble" slowly burstingSubmitted by Jim Brown on Tue, 01/27/2009 - 15:35
NEW YORK (Reuters) - The Treasury bond "bubble" looks like it's leaking air.
Over the last three weeks, investors have been selling U.S. Treasury bonds heavily, giving the 30-year Treasury bond's yield this week its biggest weekly jump since 2001, shortly after the September 11 attacks on the United States.
The sudden rise in lending rates complicates the U.S. push to lower mortgage rates and other consumer borrowing costs and kick-start the fragile American economy.
"Treasury bonds have sold off as markets have started to digest the rapidly growing volume of future government issuance," said Mohamed El-Erian, chief executive of bond giant Pacific Investment Management Co, or Pimco.