Yields drop on FED minutes
Bond prices rose Tuesday, as traders found little of concern in the minutes of a meeting by Federal Reserve policymakers.
The price of the benchmark 10-year Treasury note rose 9/32 point, or $2.81 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 4.03 percent compared with 4.06 percent late Monday.
The 30-year Treasury bond rose 7/16 point to yield 4.36 percent, down from 4.38 percent a day earlier, according to Moneyline Telerate.
The rise in bond followed the release of minutes from the Fed’s May 3 meeting, which had been highly anticipated by the market. The text showed policymakers were concerned about inflation and an economic slowdown, but still believed interest rates could be increased gradually.
The Dow Jones industrial average fell 20 to 10,504. The Standard & Poor’s 500 index rose by less than 1 point to close at 1,194. The Nasdaq composite index gained 5 to 2,062.
In other trading, the benchmark 2-year note rose 1/16 point to yield 3.59 percent, down from Monday’s 3.62 percent. Intermediate maturities rose between 3/32 point and 15/32 point.
Yields on one-month Treasury bills were 2.69 percent as the discount rose 0.04 percentage point to 2.64 percent. Yields on three-month Treasury bills were 2.94 percent as the discount rose 0.03 percentage point to 2.88 percent. Six-month yields were 3.18 percent, as the discount rose 0.02 percentage point to 3.08 percent.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
The federal funds rate, the interest on overnight loans between banks, was unchanged from late Monday at 3 percent.
The price of the benchmark 10-year Treasury note rose 9/32 point, or $2.81 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 4.03 percent compared with 4.06 percent late Monday.
The 30-year Treasury bond rose 7/16 point to yield 4.36 percent, down from 4.38 percent a day earlier, according to Moneyline Telerate.
The rise in bond followed the release of minutes from the Fed’s May 3 meeting, which had been highly anticipated by the market. The text showed policymakers were concerned about inflation and an economic slowdown, but still believed interest rates could be increased gradually.
The Dow Jones industrial average fell 20 to 10,504. The Standard & Poor’s 500 index rose by less than 1 point to close at 1,194. The Nasdaq composite index gained 5 to 2,062.
In other trading, the benchmark 2-year note rose 1/16 point to yield 3.59 percent, down from Monday’s 3.62 percent. Intermediate maturities rose between 3/32 point and 15/32 point.
Yields on one-month Treasury bills were 2.69 percent as the discount rose 0.04 percentage point to 2.64 percent. Yields on three-month Treasury bills were 2.94 percent as the discount rose 0.03 percentage point to 2.88 percent. Six-month yields were 3.18 percent, as the discount rose 0.02 percentage point to 3.08 percent.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
The federal funds rate, the interest on overnight loans between banks, was unchanged from late Monday at 3 percent.
May 25, 2005
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