WASHINGTON — Treasury prices are dropping as emerging plans to aid Europe’s banks diminished the appeal of U.S. government debt.
The European Commission’s president said Wednesday banks should stop paying dividends and bonuses until they have increased their capital cushions. Banks need the emergency cash because they hold billions in Greek debt. Greece’s default could cause them big losses.
The leaders of France and Germany pledged last weekend to outline a bank-rescue plan by the end of October.
Traders flocked to investments such as stocks that can offer much larger returns when the economy is strong. They sold Treasurys.
The price of the 10-year Treasury note fell 56 cents for every $100 invested. That pushed its yield up to 2.21 percent at 11:40 a.m. Eastern time from 2.16 percent late Tuesday.