Treasury bond prices continue to rally |
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Wed, 18 Apr 2007 17:08
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NEW YORK (AP) - Prices for U.S. Treasury bonds were higher early Wednesday in U.S. trading, with the market continuing to gain support from Tuesday's tepid consumer price inflation data.At 11 a.m. EDT, the 10-year Treasury note was up $2.19 per $1,000 in face value, or 7/32 point, from its level at 5 p.m. Tuesday. Its yield, which moves in the opposite direction, fell to 4.65 percent from 4.68 percent.The 30-year bond rose 12/32 point. Its yield fell to 4.82 percent from 4.84 percent.The 2-year note rose 2/32 point. Its yield fell to 4.64 percent from 4.68 percent.Yields on 3-month Treasury bills were 5.00 percent as the discount rate fell 0.01 percentage point to 4.86 percent.'Bonds are up a little bit and stock (futures) are off. It's a little bit of follow-through from (Tuesday),' said Scott Gewirtz, head of Treasurys trading at Lehman Brothers.On Tuesday, the Labor Department reported that the core consumer price index, excluding food and energy, rose 0.1 percent in March. That was below the 0.2 percent expected. Headline inflation rose 0.6 percent. The market also received a bid from weak industrial production numbers from the Federal Reserve.Gewirtz said 'inflation has been the big thing for the Fed. Growth has been slower but inflation has stayed higher, so CPI was a surprise.'Whether inflation stays weaker next month is far from certain, he said, but Tuesday's data report 'definitely takes the pressure off the Fed.'The Fed has held rates steady at 5.25 percent for its last six policy meetings. Policymakers have long predicted that inflation would gradually tame in line with a weaker economy but inflation pressures had remained stubbornly high.There are no major U.S. economic reports Wednesday and no Fed speakers scheduled.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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