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| U.S. 10-Year Notes Decline |
| 2004-04-30 |
| April 30th, 2004 (Bloomberg) -- U.S. Treasury 10-year notes headed for a sixth weekly loss after a government report showed inflation is quickening, raising speculation the Federal Reserve will increase its key interest rate in the third quarter. An index the central bank uses to forecast inflation rose at an annual rate of 2 percent, the most since the third quarter of 2002. The release fueled expectations the Fed will boost rates to keep rising consumer prices from slowing the economy. Growth was 4.2 percent, less than the 5 percent median forecast in a Bloomberg News survey of economists. ``It’s time to sell,’’ said Yasutoshi Nagai, an economist at Daiwa Securities SMBC Co. in Tokyo. ``This is not a good time to be holding Treasuries. Inflation pressures are rising and so are Treasury yields.’’ The benchmark 4 percent note due in February 2014 fell 4/32, or $1.25 per $1,000 face amount, to 95 20/32 at 11:15 a.m. in Singapore, according to Cantor Fitzgerald LP. Its yield rose 2 basis points to 4.56 percent. A basis point is 0.01 percentage point. The 10-year note yield may rise to 4.7 percent by the end of May, Nagai said. He forecasts the Fed will raise rates in August, bringing forward his prediction for an increase in September. The U.S. unit of Daiwa is one of the 23 primary U.S. government securities dealers that trade directly with the Federal Reserve Bank of New York. |
| Posted by:Jesika Espinola |
| #2 darn...I was hoping someone would comment on this. Correct me if I'm wrong - but doesn't this show that the economy is doing well. Aren't they sayint that the interest rates are being raised to prevent the economy from growing TOO FAST??? And considering the other Espinola family dire prediction post that the oil prices are going up (again correct me if I'm wrong) wouldn't that tend to make the economy SLOW DOWN.- thus depress the need to raise interest rates and thus mean the economy is even stronger. And when buying bonds - a higher yeild is a good thing! So isn't the reason you should sell because you are shorting them - knowing that next week you use that some money to buy a bond with a higher yield?? Can someone help me out here? |
| Posted by: B 2004-04-30 9:43:36 AM |
| #1 Inflation pressures are rising and so are Treasury yields. |
| Posted by: B 2004-04-30 3:05:45 AM |