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Yields of US government debt are spiking after the European Central Bank said it would not extend its bond-buying program earlier on Thursday.
As of 2:15 p.m., the 10-year US Treasury yield is up around 7.5 basis points to 1.615%. Remember, as yields increase this means prices are decreasing.
Additionally, the yield curve has steepened significantly over the past few days. The spread between the two- and 10-year Treasurys is at a one-month high.
The move comes after European Central Bank head Mario Draghi said Thursday that the central bank has maintained its timetable for its bond-purchasing initiative, also known as quantitative easing. Draghi said the ECB does not plan to extend its QE beyond the current end date of March 2017. Some analysts were expecting a possible extension of the program.
The ECB and other central bank bond-buying programs have caused investors to move into US Treasurys because of interest-rate differentials. Thursday’s ECB decision may be causing some of this to unwind.
- Andy Kiersz/Business Insider