The yield on the three-month US Treasury bill Tuesday fell below zero for the first time as worried investors snapped up government bonds in search of shelter from the global financial firestorm.
The yield on the three-month T-bill fell as low as negative 0.051 percent around 1500 GMT, and three hours later stood at negative 0.001 percent.
In another historic first, the US government borrowed 30 billion dollars interest-free for 28 days on the bond market.
All the buyers of the 28-day obligations agreed to the zero rate offered in a sale where demand was four times higher than supply, the Treasury said on its website.
The previous record low was reached five days earlier, when the Treasury sold 36 billion dollars' worth of 29-day bills at a rate of 0.04 percent.
Other Treasury bonds Tuesday held slim positive yields, including the four-week bill at 0.010 percent at 1800 GMT.
Bond yields and prices move in opposite directions. The low yields reflect a surge in demand for these instruments, seen as the safest in the world during times of turmoil.
Analysts say the fear factor has pushed up demand for Treasuries, since investors are virtually certain the US government will not default.
Other factors include worries about deflation and the overall trend in interest rates, with the Federal Reserve having cut its base lending rate to a historic low of 1.0 percent, and further reductions possible.
In the case of the three-month T-bill Tuesday, investors bought the bond at a price above the face value promised if they were kept to maturity, three months after their issue.
The minus-zero yield suggests that investors were seeking greater security from a government instrument and also were betting on deflation in the coming months.
The yield decline allows the Treasury to refinance its coffers at a modest price.
On Monday the Treasury issued 27 billion dollars in three-month bills at an interest rate of 0.005 percent, which had been the lowest rate since the bonds were first issued in 1929.
The yield on the three-month T-bill fell as low as negative 0.051 percent around 1500 GMT, and three hours later stood at negative 0.001 percent.
In another historic first, the US government borrowed 30 billion dollars interest-free for 28 days on the bond market.
All the buyers of the 28-day obligations agreed to the zero rate offered in a sale where demand was four times higher than supply, the Treasury said on its website.
The previous record low was reached five days earlier, when the Treasury sold 36 billion dollars' worth of 29-day bills at a rate of 0.04 percent.
Other Treasury bonds Tuesday held slim positive yields, including the four-week bill at 0.010 percent at 1800 GMT.
Bond yields and prices move in opposite directions. The low yields reflect a surge in demand for these instruments, seen as the safest in the world during times of turmoil.
Analysts say the fear factor has pushed up demand for Treasuries, since investors are virtually certain the US government will not default.
Other factors include worries about deflation and the overall trend in interest rates, with the Federal Reserve having cut its base lending rate to a historic low of 1.0 percent, and further reductions possible.
In the case of the three-month T-bill Tuesday, investors bought the bond at a price above the face value promised if they were kept to maturity, three months after their issue.
The minus-zero yield suggests that investors were seeking greater security from a government instrument and also were betting on deflation in the coming months.
The yield decline allows the Treasury to refinance its coffers at a modest price.
On Monday the Treasury issued 27 billion dollars in three-month bills at an interest rate of 0.005 percent, which had been the lowest rate since the bonds were first issued in 1929.
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