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TREASURIES-US short-dated yields rise to 3-1/2-month high

BY Reuters | TREASURY | 11/12/24 03:16 AM EST

By Stefano Rebaudo

Nov 12 (Reuters) - Short-dated U.S. Treasury yields jumped to a fresh 3-1/2-month high on Tuesday as investors priced in the possibility of higher rates from U.S. President-elect Donald Trump's proposed policies on taxes and trade tariffs.

The bond market had been closed for a holiday the day before.

Analysts expect Trump's administration to bring more government borrowing due to higher fiscal deficits, lower taxes and higher tariffs.

The U.S. 2-year yield, which is very sensitive to expectations for U.S. interest rates, rose to 4.33%, its highest since July 31 and was last up 7 basis points (bps) to 4.32%.

The benchmark U.S. 10-year yield rose 5 bps to 4.35%. (Reporting by Stefano Rebaudo, editing by Amanda Cooper)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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