Treasury yields soar as Fed signals no more buying

AP News
Posted: Apr 03, 2012 4:31 PM
Treasury yields soar as Fed signals no more buying

Prices for U.S. Treasurys fell Tuesday after Federal Reserve policymakers appeared less likely to support another round of bond-buying to help the economy.

The Fed has tried bond-buying twice before, most recently in August 2010, to lower long-term interest rates and jump-start the economy. Treasury yields have remained low in part because of the Fed's buying.

Minutes from the Fed's most recent Open Market Committee meeting showed that only two of 10 voting members supported a third round of bond-buying.

"Some misplaced hopes were dashed," said Mike Wallace, global market strategist at Action Economics. "The Fed is getting more comfortable with improving unemployment trends and the modest pace of recovery."

The news sent bond yields rising. The yield on the benchmark 10-year Treasury note rose to 2.29 percent from 2.19 percent late Monday. Its price fell 84 cents for every $100 invested. The yield on the 30-year Treasury bond rose to 3.43 percent from 3.34 percent. Its price fell $1.59.

In other trading, the yield on the two-year Treasury note rose to 0.37 percent from 0.32 percent. The yield on the three-month T-bill rose to 0.08 percent from 0.06 late Monday.