(Bloomberg) — Treasuries gained, with the 30-year yield reaching the lowest level since early April, amid similar price action in the UK and Canadian bond markets and a U.S. government shutdown on the verge of becoming the second-longest on record.
The U.S. 30-year yield declined as much as four basis points to 4.53%, the lowest since April 7. Shorter-maturity yields slipped less and remained inside the past week’s ranges. Price action in UK and Canadian markets underpinned the move, which lacked a fundamental catalyst.
However, the US government shutdown that began Oct. 1 and has delayed the release of many economic statistics has helped drive gains in the Treasury market as it disrupts normal activity.
“Bond traders are bulled up,” Andrew Brenner, vice chairman at Natalliance Securities, wrote in a note Tuesday. “Rates continue to grind lower and flatter.”
Among key yield-curve segments, the 30-year yield is less than 100 basis points higher than the five-year note’s, down from a peak gap of more than 125 basis points in early September. The US 10-year yield is about 50 basis points above the two-year note’s, vs more than 60 basis points higher in recent months.
Shorter-maturity yields are more closely tied to the interest rate set by the Federal Reserve, which the central bank lowered in September and is expected to trim further on Oct. 29 and Dec. 10.
What Bloomberg Strategists say…
“The forward implications for inflation of Wednesday’s slides in gold, silver and oil also support duration. The SOFR spread versus the effective Fed funds is signaling rising risk. And investors are pulling cash from CLO ETFs with the biggest outflows since April. All these combined can keep yields pressing lower.”
—Alyce Andres, Macro Strategist, Markets Live
The UK and Canadian yield curves also flattened Tuesday. The UK market reflected expectations that domestic inflation data to be released Wednesday will show acceleration that forestalls interest-rate cuts by the Bank of England, while in Canada, data released Tuesday showed consumer prices rose more than economists had estimated.
The U.S. consumer price index for September is slated for release on Oct. 24, delayed from last week by the government shutdown.
Also in the past month, disclosures by several U.S. banks of impaired loans have sparked share-price declines that stoked demand for Treasuries.
While the Fed is likely to cut rates this month by another quarter point, the chance of a half-point reduction in December “has increased dramatically” because of credit concerns in the U.S. economy, Earl Davis, head of fixed income and money markets at BMO Global Asset Management, told Bloomberg Surveillance.
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Last modified: October 21, 2025