US bond prices tank following tax cut pledge

US bond prices fell again yesterday after suffering their fastest sell-off in 18 months, as traders fretted over the effects of President Barack Obama’s move to extend some of George W Bush’s tax cuts.

Yields on 10-year government bonds jumped to 3.24 per cent, the highest level since June, as the price tumbled.

Traders’ distaste for US bonds meant buyers at a $21bn (£13.3bn) 10-year bond auction yesterday commanded yields of 3.34 per cent, the highest level since May.

The Treasury is due to sell $13bn in 30-year bonds today.

Investors bought into the dollar, which rose 0.17 per cent against a basket of currencies, in the wake of Obama’s decision to bolster the economy with tax cuts.