Treasuries Drop as U.S. Sells $35 Billion in 5-Year Notes

Treasuries fell for the first time in five days as the U.S. received the lowest demand at a five-year note auction this year with investors speculating the Federal Reserve is moving closer to raising interest rates.

The $35 billion sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.56, the lowest since December and versus an average of 2.75 for the past 10 sales. The Fed’s 22 primary dealers were left with 41 percent of the notes, the most since January. Government securities headed for the steepest monthly loss this year after central-bank officials raised their median forecast for borrowing costs.