Two-Year Treasury Yield Falls to Record Low
October 4th, 2010Via: Bloomberg:
Treasury two-year yields fell to a record before a government report that economists said will show orders to U.S. factories declined, adding to speculation the Federal Reserve will increase asset purchases.
Three-year note yields touched the lowest since 1962 before an employment report on Oct. 8 is forecast to show no change in overall payrolls last month. The Fed is scheduled to buy Treasuries tomorrow and the next day as part of its plan to keep borrowing costs low. New York Fed President William Dudley said on Oct. 1 the central bank will probably need to take action to spur the economic recovery.
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The two-year yield dropped to a record 0.3987 percent before trading at 0.41 percent, according to Bloomberg generic data. The three-year yield touched 0.5892 percent.
Ten-year yields declined 1 basis point, or 0.01 percentage point, to 2.50 percent at 9:17 a.m. in New York, according to BGCantor Market Data. The 2.625 percent security due in August 2020 rose 2/32, or 63 cents per $1,000 face amount, to 101 2/32.
Speculation the Fed will purchase additional bonds as a way to pump money into the economy, a strategy known as quantitative easing, has been rising since Chairman Ben S. Bernanke said Aug. 10 it would reinvest proceeds from maturing mortgage holdings into government debt.
