Oddball stories from 2010
Well, it was bound to happen sooner or later. In October, for the first time in the history of U.S. debt issuance, the Treasury Department sold government paper that produced a negative yield.
The Treasury Department's $10 billion sale of five-year Treasury inflation-protected securities (TIPs) drew a yield of negative 0.55%. “These negative yields are being driven by the Federal Reserve and their push to increase inflation expectations,” Michael Pond, co-head of U.S. rates strategy at Barclays PLC, told Bloomberg News before the sale.
In case you're interested, the U.S. does have a rule prohibiting a negative yield on government-issued paper other than inflation-linked debt. The rule doesn't come up too often. (Photo: Bloomberg News)