Investors dump Treasurys after Fed minutes

AP News
Posted: Apr 05, 2011 5:08 PM
Investors dump Treasurys after Fed minutes

Investors sold Treasurys Tuesday after minutes from the Federal Reserve's last meeting revealed that officials considered restricting credit because of concerns about inflation.

The price of the 10-year Treasury note fell 53 cents per $100 invested in late trading. Its yield, which moves in the opposite direction, rose to 3.49 percent from 3.43 percent late Monday.

Minutes from the Fed's March 15 meeting revealed some members worried that a spike in energy prices could stifle the economy and lead to inflation. Some suggested the Fed could tighten credit this year.

That could mean the Fed will raise short-term interest rates, although that strategy wasn't mentioned in the meeting.

The central bank's members also voted unanimously to maintain the pace of its $600 billion Treasury bond-buying program to boost the economy and reduce unemployment.

In other trading, the price of the 30-year bond fell 50 cents per $100 invested, while its yield rose to 4.51 percent from 4.49 percent late Monday. The yield on the two-year note increased to 0.82 percent from 0.77 percent.

The yield on the three-month T-bill rose to 0.06 percent from 0.04 percent. The discount was also 0.06 percent.