Treasurys dip as debt ceiling debate continues

AP News
Posted: Jul 25, 2011 5:27 PM
Treasurys dip as debt ceiling debate continues

Treasury bond prices edged lower Monday as Washington continued to debate plans to raise the nation's debt ceiling before an Aug. 2 deadline.

A failure to raise the debt ceiling could lead the U.S. government to default on its bond payments, which would likely push interest rates sharply higher. Treasury bonds are considered the safest and most liquid investments in the world.

The impasse helped send the price of the 10-year Treasury down 34 cents for every $100 invested Monday. That pushed the yield up to 3.00 percent from 2.96 percent late Friday.

Longer-term Treasurys fell further. The price of the 30-year Treasury lost $1.06 for every $100 invested. Its yield rose to 4.32 percent from 4.26 percent late Friday.

Bond yields move in the opposite direction of their prices.

Treasury auctions are scheduled for Tuesday, Wednesday and Thursday. The government expects to sell a total of $99 billion in new debt this week.

The yield on the 3-month bill rose to 0.04 percent from 0.03 percent. Its discount was 0.05 percent.