The difference between 2- and 10-year Treasury note yields has increased to 281.4 basis points ahead of the government announcement on Wednesday as to how much it plans to auction in 2-, 5- and 7-year securities next week.
At the start of the year the spread was only 145 basis points.
The yield on the benchmark 10-year note climbed 10 basis points, or 0.10 percentage point, to 3.64 percent at 12:21 p.m. in New York, according to BGCantor Market Data, the highest level since Aug. 13. The 3.375 percent security due November 2019 fell 25/32, or $7.81 per $1,000 face amount, to 97 27/32. The two-year yield rose five basis points to 0.84 percent.
You really have to be insane to go out on the yield curve with the amount of debt the government is going to have to issue next year. That's why the curve is steepening.
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