Treasury 30-Year Bonds Advance as Fisher Says Fed Doesn't Want Inflation

Quantitative easing - pumping money into the economy causes inflation for anyone still impressionable enough to follow 'official' words rather than action. If you double the money supply in the game of Monopoly and allow free markets (opening bidding) to set the price of properties, you'll notice that Boardwalk sells for a lot more than $500. Of course, the rising price of Boardwalk wouldn’t be considered inflation if you were playing against the Bureau of Labor and Statistics (BLS). They would calmly suggest that owner’s equivalent rent rather than market prices contribute to board game’s CPI.

Treasuries rose, climbing back from their steepest loss in two months, as Federal Reserve Bank of Dallas President Richard Fisher said policy makers don’t want inflation as they pump money into the economy.

Fisher’s comments spurred speculation demand will increase today when the U.S. sells $16 billion of 30-year debt, those securities most sensitive to costs in the economy, after bidding waned at a 10-year auction yesterday. The extra yield the long bonds offer over 10-year notes closed at a record 1.59 percentage points yesterday, which will help attract investors, according to Barclays Capital Inc.

Source: finance.yahoo.com