Robert S. Kaplan of the Federal Reserve Bank of Dallas said, “The U.S. economy is strong enough to justify an interest-rate hike in the ‘not too distant future,’ but increases will be very gradual.”
Mutual funds like the Vanguard GNMA Fund – Investor Shares (VFIIX) and the T. Rowe Price US Treasury Long-Term Fund (PRULX) invest in five-year Treasury notes.
The yield on the benchmark ten-year Treasury note stood at 1.97% on March 15, a day before the March policy statement. The next day, it fell just 3 basis points.
US Treasury yields rose across the yield curve after upbeat consumer inflation data suggested that the Fed may hike interest rates earlier than expected.
The US Department of the Treasury conducts an auction for ten-year T-notes once a month. The yield on the ten-year T-notes is a benchmark in the financial markets.
The monthly auction for 30-year Treasury bonds was held on October 8, 2015, for $13 billion—the same as in the previous month. The high yield fell to 2.91%.
Following the auction of five-year Treasury notes, yield in the secondary market rose marginally by 3 basis points from the previous day. Yield ended September 23 at 1.47%.
