Treasuries fell, extending the worst losses in five years, as stocks gained and on speculation the U.S. will announce plans tomorrow to sell $60 billion of debt next week as it borrows record amounts to spur the economy.
The 10-year yield rose the most in a week as the cost of protecting against losses on Treasuries climbed, indicating increased concern that supply is overwhelming demand. Kyle Bass, the hedge-fund manager who made $500 million in 2007 betting on declines on subprime mortgages, said government borrowing around the world is creating a “potential inflationary time bomb.” The MSCI World Index advanced for the first time in six days.
“Concerns about supply and the credit worthiness of the U.S. are driving the market,” said Peter Mueller, a Frankfurt- based fixed-income strategist at Commerzbank AG, Germany’s second-largest lender. “The economic situation means the budget deficit will explode further.”