Yields on long-term U.S. government bonds and notes fell to record low levels Tuesday, as global investors went on a buying spree in the hope of escaping the turbulence that has roiled financial markets following Britain's Brexit vote to leave the European Union.
U.S. Treasury 10-year notes closed at 1.37 percent, after touching an intraday low point of 1.357 percent. The previous low rate for the benchmark notes was 1.404 percent in July 2012, during a sovereign debt crisis in the eurozone.
In a widespread round of descending yields, rates on 10-year government debt also fell to historic lows in Germany, Switzerland, France, Denmark, Sweden and Britain itself. For many investors, however, U.S. bonds and notes seemed to be the safest alternative.
Because interest rates are inversely proportional to bond prices, Tuesday's fluctuations meant bonds were trading at prices high above their face value.
The yield on 30-year U.S. Treasury bonds sank to 2.138 percent, another record. Similar price trends prevailed in trading for 5- and 7-year Treasuries.
The return to record low yields on U.S. government securities, just six months after the U.S. Federal Reserve raised its benchmark short-term interest rate for the first time in a decade, stunned investors and policymakers alike, financial reporters said.
Most investors had been anticipating a rising trend in T-bill yields this year. But after Tuesday's trading, market experts analyzing federal funds futures data said they now expect the Fed to keep interest rates steady for some time to come — possibly throughout 2017.