Treasury Securities Fall, Again

U.S. Treasurys fell Friday on worries an expected flood of new debt from the government will heavily dilute the market.

Benchmark 10-year notes were trading 15/32 lower in price for a yield of 2.84 percent, from 2.79 percent late Thursday.

The market knows a lot of debt is on its way. Reuters quotes Thomas di Galoma, head of U.S. Treasury trading at Jefferies & Co. in New York as saying:

There is speculation that we are going to see a larger (government) package than we thought we were going to see, including subsidies, and that is weighing on the market.

This kind of thinking is going to dominate bond traders for 100's and 100's of upside basis point action, for a long time to come.