Bonds slip

Long-dated US Treasury debt prices sank on early Tuesday after the Federal Reserve's decision to lower interest rates aggressively sent the stock market on a tear and rekindled worries about inflation. But short-dated bonds rallied on the prospect of further rate cuts.
The central bank said its decision to slash the key federal funds rate by half a percentage point to 4.75 percent was aimed at preventing tighter credit conditions from taking a more severe toll on the economy.
Safe-haven government securities suffered, with benchmark 10-year notes falling 12/32, and offering a yield of 4.52 percent, up from 4.47 percent at Monday's close.
Indeed, shorter maturities benefited from the outlook for even lower rates ahead, with two-year notes jumping 4/32 for a yield of 4.01 percent. Spreads between 10- and two-year notes gaped 12 basis points to 51, the steepest in more than two years.