A decline in U.S. government debt yields accelerated Thursday after a report on manufacturing activity fanned fears that U.S. economic growth is on track to slow over the coming year.
The yield on the benchmark 10-year Treasury note fell 8 basis points to 2.58 percent, while the yield on the 30-year Treasury bond dropped 5 basis points to 2.926 percent. The 5-year Treasury note yield lost 9 basis points to 2.40 percent, below the 2-year yield of 2.43 percent. Yields fall when bond prices rise.
Though government debt yields had fallen overnight, rates sank further after the Institute for Supply Management said its manufacturing index read 54.1 in December, down from 59.3 in November. Economists polled by Refinitiv expected the index to slip to 57.9 in December.
"Comments from the panel reflect continued expanding business strength, but at much lower levels," said Timothy Fiore, chair of the Institute for Supply Management, in statement. "Demand softened, with the New Orders Index retreating to recent low levels, the Customers' Inventories Index remaining too low — a positive heading into the first quarter of 2019 — and the Backlog of Orders declining to a zero-expansion level."