U.S. government bonds were down again Thursday as yields on the benchmark 10-year note almost touched 3% and intermediate-term Treasury ETFs fell to new multiyear lows.
For example, iShares 3-7 Year Treasury Bond ETF (NYSEArca: IEI) and iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) are trading at their lowest prices since 2011. IEI saw the second-highest outflow among U.S.-listed ETFs last month with redemptions of more than $2.3 billion, according to IndexUniverse data.
Yields on the 10-year note have spiked to nearly 3% from about 1.6% in early May on expectations the Federal Reserve will pull back from its bond-buying program.
The iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) is down more than 10% year to date. Bond prices and yields move in opposite directions.
U.S. Treasuries suffered their fourth consecutive monthly loss in August. “Altogether, there is plenty of scope for 10-year yields not just to breach the psychologically key 3% barrier – a level unseen since July 2011 – but to overshoot and notch further multi-year highs in coming months,” Reuters reports.
Treasury yields were rising Thursday following a report that weekly jobless claims declined more than expected. Also Thursday, private-sector jobs rose by 176,000 in August, MarketWatch reports. [Stock ETFs Look to Jobs Report]