Shaw Capital Management World Financial News: Treasury 30-Year Bonds Decline After Fed Vows to Keep Interest Rates Low

http://world.shawcapitalmanagementfinancialnews.com/


http://www.bloomberg.com/news/2011-08-10/treasury-30-year-bonds-decline-after-fed-vows-to-keep-interest-rates-low.html
By Wes Goodman – Aug 9, 2011 5:47 PM PT
Treasury 30-year bonds fell, snapping a two-day rally, on speculation the Federal Reserve’s pledge to keep interest rates at a record low will lead to faster inflation over the life of the securities.
Shorter maturities, which are more sensitive to what the central bank does with its target for overnight loans between banks, were little changed. The Treasury is scheduled to sell $24 billion of 10-year notes today and $16 billion of 30-year debt tomorrow.
“The Fed committed to keeping rates low,” said Tomohisa Fujiki, a bond strategist at BNP Paribas Securities Japan Ltd. in Tokyo. “Shorter maturities should be well-supported. With any pickup in economic sentiment, longer maturities will be vulnerable to higher inflation.”
Thirty-year yields climbed three basis points to 3.64 percent as of 9:40 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 4.375 percent security maturing in May 2041 fell 1/2, or $5 per $1,000 face amount, to 113 6/32. Ten-year notes yielded 2.24 percent.
Japan’s 10-year bond yield was little changed at 1.035 percent. The rate dropped to 0.975 percent on Aug. 9, the lowest level this year.