High demand for U.S. government debt pushed the yield on the 30-year Treasury bond down to a record low Wednesday.
Worsening concerns about Europe's latest efforts to contain its debt crisis are keeping demand brisk for Treasury securities. The Treasury Department sold $13 billion worth of 30-year bonds at a record low yield of 2.925 percent.
Investors bid $3.05 for every dollar of bonds up for sale, much higher than the average of $2.81 over the past four auctions. Nomura securities analysts said in a note to clients that investors had an "insatiable appetite" for Treasurys.
A spike in borrowing costs for Italy increased demand for Treasurys as worries about Europe's debt crisis worsened. Markets have been growing skeptical that a fiscal pact announced last Friday by European leaders will be enough to ease strains on Europe's financial system and keep the euro intact.
The yield on the 10-year Treasury note fell to 1.91 percent from 1.96 percent late Tuesday. The price rose 62.5 cents per $100 invested.
The yield on 30-year bonds already in circulation fell to 2.90 percent from 3 percent. The price jumped $2.28.
In other trading, the two-year Treasury note yielded 0.25 percent, unchanged from late Tuesday.
In T-bills, the yield on the three-month bill was flat at 0.01 percent. Its discount wasn't available.