By Gertrude Chavez-Dreyfuss
NEW YORK, March 27 U.S. long-dated Treasury
yields fell to one-month lows on Monday, weighed down by growing
uncertainty about whether the Trump administration could deliver
on its campaign promise to bolster the economy.
Trump suffered a major political setback last Friday when
fellow Republicans pulled their healthcare plan after years of
promising to abolish former President Barack Obama's 2010 health
Yields, which move inversely to prices, had soared following
Donald Trump's election as President last November on the
expectation of more stimulus measures that could push inflation
higher and prompt the Federal Reserve to raise interest rates at
a faster pace.
But since the Fed raised rates a few weeks ago and stuck to
its pace of three rate hikes this year, yields have fallen. U.S.
10-year note yields have declined by a quarter of a percentage
point, while that of U.S. 30-year bonds have dropped 20 basis
"This is just follow-through from Friday. There is
disappointment over the inability to pass the reform of
Obamacare," said Gennadiy Goldberg, interest rates strategist at
TD Securities in New York.
"There was also some concern over the time line over the tax
reform," he added.
Investors feared that the healthcare bill's defeat augured
badly for tax reform.
House Ways and Means Committee Chairman Kevin Brady said his
committee had been working on tax reform in parallel with the
failed healthcare reform push. Brady said the committee plans to
move on the tax bill in the spring.
In mid-morning trading, benchmark 10-year
notes gained 11/32 in price to yield 2.362 percent,
down from 2.4 percent on Friday. Yields fell as low as 2.348
percent, their weakest level in one month. They were down from a
three-month high of 2.63 percent on March 14.
U.S. 30-year bond prices rose 15/32 , yielding
2.976 percent. Earlier, yields slid to 2.96 percent, their
lowest since Feb. 28.
The Treasury Department will sell $88 billion in new
two-year, five-year and seven-year notes this week.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu