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Thursday, March 25, 2010

Interest rates surge after weak Treasury auction

Interest rates surged in the bond market Wednesday after a government debt auction drew only tepid demand for a second day.

The disappointing turnout for the Treasury Department's $42 billion auction of five-year notes raised the prospect that investors' appetite could be waning for Washington's IOUs. If demand for debt drops, the government would be forced to pay higher interest rates to attract investors.

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