Treasury bonds

Treasuries fell after the US government signaled that larger auction sizes are on the horizon, while signs of economic resilience hurt the odds a Federal Reserve interest-rate cut in December.

In its so-called quarterly refunding statement Wednesday, the Treasury department said it anticipated keeping auction sizes unchanged for nominal notes, bonds and floating-rate notes, "for at least the next several quarters."

Wall Street dealers expect Bessent to signal as soon as Wednesday, when his department releases a quarterly statement on debt sales, that issuance in the $30 trillion Treasury market will keep shifting in that direction.

The shutdown started with a flight into treasury bonds, putting downward pressure on financing costs, but several other developments slowed mortgage activity.

The US 30-year yield climbed as much as four basis points to 4.999% on Wednesday before stabilizing.

US Treasuries retained most of their recent gains as anticipation of Federal Reserve interest rate cuts held firm after the central bank's preferred gauge of inflation matched economist estimates.

President Donald Trump's unprecedented and escalating attack on the Federal Reserve runs the risk of backfiring by hitting financial markets and the economy with higher long-term borrowing costs.

Treasury bonds jumped, widening the gap between short- and long-term yields to the most in almost four years — a typical reaction to a more dovish Fed.

Bond traders' big bet that the Federal Reserve is poised to lower interest rates faces a key moment this week as Chair Jerome Powell gets a chance to weigh in on the economy.

US Treasuries, coming off their best day so far this year on Friday, held onto most of the move to start a week featuring a heavy slate of note and bond auctions.