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TREASURIES-U.S. TIPS yields fall to record low for a second straight day

·1 min read

The yield on the 10-year U.S. Treasury Inflation-Protected Securities (TIPS) fell to a record low for a second straight session on Tuesday.

Real, or inflation-adjusted, bond yields across major economies have fallen in recent sessions, a move analysts attribute to growing concern about the economic outlook following an upsurge in COVID variants, as well as technical factors such as hefty bond-buying by central banks.

By 0745 GMT, the yield on 10-year TIPS had fallen to as low as -1.147%, down about 4 basis points on the day.

"Another factor driving real yields down could be the relatively dovish tone from Fed Chair Jerome Powell and the European Central Bank," UniCredit analysts said in a note.

"This might have depressed real yields in the U.S. and the euro area and percolated through to other countries."

Nominal Treasury yields were also lower across the board, though trading was generally subdued ahead of a two-day U.S. Federal Reserve meeting that kicks off later on Tuesday.

The 10-year Treasury yield slipped 2.5 bps to 1.25% .

(Reporting by Dhara Ranasinghe; editing by Sujata Rao)

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