Treasury Prices Fall Hard, Reflecting Investors' Worries
A combination of mortgage-related selling and concerns over upcoming inflation data sent U.S. Treasury prices sharply lower and yields higher.</br></br>Selling was the most pronounced in the five-year sector, in part due to mortgage servicers paring holdings as they re-hedged in a higher- rate environment.</br></br>Inflation fears ahead of the government's January consumer-price- index report due this morning and in the wake of yesterday's record increases in commodity prices helped drive bond prices lower.</br></br>Crude-oil futures hit a record intraday level of $100.10 a barrel, rattling the government-bond market and equities. The benchmark 10- year note was down 25/32 point, or $7.8125 per $1,000 face value, at 96 30/32. Its yield rose to 3.875% from 3.780% Friday; yields move inversely to prices. The 30-year bond was down 30/32 point at 95 16/32 to yield 4.655%, up from 4.595%.</br></br>"It's gotten ugly," said Carl Lantz, fixed-income strategist at Credit Suisse.