Two-year US Treasury bond yields drop below 5 percent

Prices were up and yields down on US Treasury bonds on Tuesday after new data showed housing starts down in May.

The risks the decline poses to the economy is only accentuated by recent problems in the sub-prime mortgage sector.

The fallout from the mortgage problems, fewer risky borrowers able to get loans to buy a house, could cause the housing slump to last longer than it otherwise would according to some analysts.

Two-year US Treasury bonds saw yields fall to 4.97 percent from Monday’s 5 percent. Yields on five-year paper dropped from 5.06 percent late Monday to 5.01 percent on Tuesday.

Ten-year notes were yielding 5.09 percent, down from Monday’s yield of 5.14 percent. Yields on thirty-year bonds fell from 5.25 percent on Monday to 5.21 percent on Tuesday.

Story link: Two-year US Treasury bond yields drop below 5 percent