Treasuries Tumble as Fed Signals U.S. Debt Purchases on Hold
Treasuries fell as the Federal Reserve signaled it's not going to purchase U.S. securities to lower consumer borrowing costs any time soon, dpa reported.
Thirty-year bonds dropped after the minutes of the Fed's Jan. 27-28 policy meeting showed officials will wait before buying Treasuries. The government tomorrow will announce the size of next week's auctions of two-, five-, and seven-year notes. The likely total is $97 billion, according to Wrightson ICAP LLC.
"Why wait?" said Michael Franzese, head of government bond trading for Standard Chartered in New York. "Why not take the pressure off the market by saying it's imminent, or by saying it will be within a target range?"
Yields on 30-year bonds rose seven basis points, or 0.07 percentage point, to 3.55 percent at 3:42 p.m. in New York, according to BGCantor Market Data. The 3.5 percent security due in February 2039 fell 1 10/32, or $13.13 per $1,000 face amount, to 99 2/32.
Two-year note yields climbed 11 basis points, the most since Nov. 21, to 0.96 percent. Benchmark 10-year note yields increased 10 basis points to 2.75 percent.