Dec. 25 (Bloomberg) -- Treasuries fell, with the difference in yields between 2- and 10-year notes widening to a record amount, as investors bet the U.S. recovery will fuel inflation and reduce demand at the government’s debt auctions.
The 10-year note’s yield climbed to the highest level in four months as reports showed increases in sales of existing homes and orders for durable goods. The U.S. will sell a record- tying $118 billion of 2-, 5- and 7-year notes next week.
“We are in a steepening trend,” said John Spinello, chief technical strategist in New York at Jefferies Group Inc., one of the Federal Reserve’s 18 primary dealers, which are required to bid at government debt auctions. “It was the recognition that the Treasury will be extending the debt as we know it and the economy is showing signs of recovery.”