Treasurys flat; Fed reports tepid growth

AP News
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Posted: Oct 20, 2010 5:37 PM
Treasurys flat; Fed reports tepid growth

Treasury prices were mostly flat on Wednesday, as traders hunted for signs the Federal Reserve will jump into the bond market.

The Fed's Beige Book survey, released Wednesday afternoon, offered a mixed bag. The report said seven of the Fed's 12 regions showed moderate economic improvement. The rest saw mixed or sluggish growth.

Over the past month, bond traders have laid bets that the Federal Reserve will start buying more Treasurys to push long-term interest rates lower and spur spending and investment. Traders have bought bonds because they expect the Fed will too. When bond prices rise, their yields fall.

Investors and economists widely expect the Fed to announce the bond buying program after its two-day meeting in early November. Until then, they're left pondering the size and scope of the effort.

The 30-year bond was up 34.3 cents to $99.65 in late afternoon trading. Its yield fell to 3.89 percent from 3.91 percent the day before.

The yield on the two-year note edged down to 0.35 percent from 0.37 percent, as its price gained 3.1 cents to $100.03.

At 2.48 percent, the yield on the 10-year was unchanged from late Tuesday.

In the Treasury bill market, the three-month T-bill paid a 0.13 percent yield at a discount of 0.14 percent.