Wednesday, May 18, 2011

Fed Easing Policy Driving Rates Lower-Ironically

The market, not the Fed, sets interest rates.

Interest rates are heading lower, counter to what many in the bond market thought might happen as the Federal Reserve reaches the end of its quantitative easing program.

The 10-year yield Tuesday slipped below 3.1 percent, just above a key technical level of 3.05/3.07 percent and the psychologically important 3.0 percent level. Treasury yields fall in an inverse move as buyers push bond prices higher.

Strategists say there are several catalysts moving bonds, including a series of weaker economic data; reinvestment from accounts that were in cash; and the flight to safety on concerns about European sovereign debt.

Source: finance.yahoo.com

0 comments:

Post a Comment