The Treasury received $81.2 billion worth of bids for the $35 billion worth of 5-year notes it offered Wednesday. That made for a bid-to-cover ratio of 2.32, which was better than last month's 5-year auction, but was weaker than Tuesday's sale of 2-year notes.
"There's a lot of paper coming to the market due to the government's needs," Cardillo said. "There is the fear that the government's spending is going to mushroom into inflation." ... http://money.cnn.com/2009/05/27/markets/markets_newyork/index.htm?postversion=2009052715
The so-called yield curve steepened to 2.75 percentage points, surpassing the previous record of 2.74 percentage points set on Aug. 13, 2003. Yields on 10-year notes have risen more than 100 basis points since Fed officials said in March they would buy up to $300 billion of U.S. debt over six months to drive consumer rates down and lift the economy from recession.
http://bloomberg.com/apps/news?pid=20601087&sid=aYHa.5_QudRo&refer=home
In addition to raising borrowing costs for the government, rising yields on Treasury debt could hamper an economic recovery since they are used as benchmarks for certain consumer loans such as home mortgages. Higher rates on those kinds of loans could prolong a recovery in the battered housing market.
http://www.google.com/hostednews/ap/article/ALeqM5jmT59dgLTTziX4p9X9MRBRpWZGdQD98EOPN81
