Treasuries headed for the worst year in at least three decades as the U.S. stepped up debt sales to help spur growth in an economy recovering from the biggest slump since the Great Depression.

The current seven-year note was little changed after a $32 billion of sale of the debt drew a yield of 3.345 percent, compared with an average forecast of 3.372 percent in a Bloomberg News survey of four of the Federal Reserve’s 18 primary dealers. U.S. government securities have fallen 3.6 percent this year, according to Bank of America Merrill Lynch indexes, the worst performance since 1978.

“Sevens came in well enough given the environment, year- end, lack of liquidity; things could have been much worse,” said Christopher Sullivan, who oversees $1.6 billion as chief investment officer at United Nations Federal Credit Union in New York. “Given the fact that short-term rates are exceedingly low, there’s been a grab for yield a little bit farther out the yield curve.”

The yield on the current seven-year note fell one basis point, or 0.01 percentage point, to 3.30 percent at 4:11 p.m. in New York, according to BGCantor Market Data. The 10-year note yield slipped one basis point to 3.79 percent, and the yield on the 30-year bond dropped three basis points to 4.61 percent.

Source/Full Story: Bloomberg.com

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