Treasury 3-year High Yield Zooms To Highest Since 2007 on Fed Unwinding

By Anthony B. Sanders

Today’s 3-year Treasury auction brought a high yield of 2.280%, the highest since 2007.


As The Fed keeps to their balance sheet unwinding (via letting notes and bonds mature), the  3-year note high yield keeps rising (rapidly).


Now, the KC Fed’s Esther George (a non-voting FOMC member) wants to speed-up The Fed’s unwind of its balance sheet.

Federal Reserve Bank of Kansas City President Esther George warned Thursday the languid pace of the central bank’s balance sheet shrinkage effort may be causing negative effects on financial markets, in remarks that again called for continued rate increases.

“Asset prices may have become distorted relative to the economic fundamentals” due to the now completed central bank bond buying effort that took place during and after the financial crisis, Ms. George said in the text of a speech to be presented in Lincoln, Neb.

Ya think, Esther?


UPDATE! The 10-year auction showed a slight in increase in the bid-t0-cover ratio, but a nice spike in the 10-year high yield rate to 2.88%.


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