Treasury sells 7-year notes at record low rate

AP News
Posted: May 24, 2012 5:07 PM
Treasury sells 7-year notes at record low rate

The U.S. Treasury department sold seven-year notes at a record low yield Thursday, the latest sign that demand for low-risk investments remains strong.

The government sold $29 billion of the notes at a rate of just 1.20 percent, the lowest on record. There were $2.80 worth of bids for every dollar sold at the auction Thursday, in line with the recent average.

Demand has been strong for U.S. Treasurys as Greece edges closer to a messy exit from the euro. Traders expect that would cause disruptions in many financial markets and increase demand for stable and easily tradable securities such as U.S. government debt.

The yield on the 10-year Treasury note rose to 1.78 percent from 1.73 percent late Wednesday. Its price fell 38 cents per $100 invested.

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In other trading, the yield on the 30-year bond rose to 2.87 percent from 2.82 percent. Its price fell $1.81. The yield on the two-year note rose to 0.30 percent from 0.26 percent.

The three-month T-bill paid a yield of 0.09 percent.