U.S. Treasury yields fell on Thursday after the relative success of a 20-year bond auction on Wednesday reduced fears about further rapid yield increases, while the U.S. Treasury saw strong demand for an auction of 10-year inflation-linked debt. Yields jumped after data last week showed that U.S. consumer prices posted their biggest gain in 31 years in October, with a weak 30-year bond auction adding to the selling pressure and corporate supply early this week extending the yield increase to three-week highs on Wednesday. read more The sell-off has now eased, however, after the U.S. Treasury sold $23 billion in 20-year bonds on Wednesday to demand that wasn’t as weak as some had feared. “I think that probably eliminates concerns that we’re headed in a rapid straight line higher in long term yields,” said Zachary Griffiths, a macro strategist at Wells Fargo in Charlotte. Benchmark 10-year notes were last at 1.587%. They have jumped from a low of 1.415% last week and are holding below five-month highs of 1.705% reached on Oct. 21. Griffiths said that he expects 10-year yields to end the year at around 1.75% to 1.80% but noted that some near-term events, including risks around the debt ceiling next month, could prompt some short-term safety buying of Treasuries in the interim. Bond moves may also stay choppy as the market struggles with reduced liquidity that is likely to worsen during the end of year holiday season. “There has been a pretty notable decline in market liquidity, which I think has been contributing to some of the outsized moves,” said Jonathan Cohn, head of rates trading strategy at Credit Suisse in New York. “The fact that we’ve already experienced some diminished liquidity suggests that this choppiness that we’ve seen can persist.” Investors are grappling with whether the Federal Reserve will need to raise interest rates sooner than expected as fears grow that rising inflation is becoming more entrenched. Inflation is becoming more broad based and expectations for future price increases are rising, a trend policymakers will be watching closely, New York Federal Reserve Bank President John Williams said on Thursday. read more Chicago Federal Reserve President Charles Evans, one of the U.S. central bank"s most reliable policy doves, also said he is "open-minded" to adjustments in monetary policy next year, if inflation continues to stay high. read more The Treasury sold $14 billion in 10-year Treasury Inflation-Protected Securities (TIPS) on Thursday to strong demand. The debt sold at a high yield of minus 1.145%. Yields on the securities have edged higher after dipping to a record low of minus 1.243% on Nov. 10, though they remain deeply negative. Data on Thursday showed that the number of Americans filing new claims for unemployment benefits fell close to pre-pandemic levels last week as the labor market recovery continues, though a shortage of workers remains an obstacle to faster job growth. read more November 18 Thursday 3:00PM New York / 2000 GMT Price Current Yield % Net Change (bps) Three-month bills 0.05 0.0507 0.000 Six-month bills 0.0625 0.0634 -0.003 Two-year note 99-193/256 0.5021 -0.002 Three-year note 99-184/256 0.8455 -0.006 Five-year note 99-136/256 1.2229 -0.015 Seven-year note 99-92/256 1.4723 -0.017 10-year note 98-12/256 1.5872 -0.017 20-year bond 99-248/256 2.0019 -0.040 30-year bond 97-208/256 1.972 -0.025 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap spread 24.25 -0.25 U.S. 3-year dollar swap spread 19.25 -0.50 U.S. 5-year dollar swap spread 9.75 -0.50 U.S. 10-year dollar swap spread 3.75 -0.75 U.S. 30-year dollar swap spread -20.00 0.00