Bond Prices Fall Again
(Justa Edit: I would watch the bonds closely here in conjunction the price of oil, heating oil and natural gas. This is getting real interesting.)
.c The Associated Press
NEW YORK (AP) - Bond prices fell Wednesday for a third consecutive session, as losses accelerated amid inflation worries precipitated about concern over rising oil prices.
The price of the benchmark 10-year Treasury note fell 21/32 point, or $6.56 per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 6.10 percent from 6.01 percent late Tuesday.
The 30-year Treasury bond slid 1 1/32 points and its yield rose to 5.96 percent from Tuesday's 5.89 percent, according to Bridge Telerate news service.
Bonds fell Wednesday after OPEC members agreed to boost daily crude oil production by 3 percent, starting July 1. Analysts said that while the increased production should cap world oil markets, it was unlikely to significantly reduce gasoline prices this summer.
The inflation concern ahead of next week's meeting of Federal Reserve policy-makers undercut bonds.
The Fed has raised interest rates six times in the past year in an attempt to curb inflation and traders are uncertain if will stand pat at the meeting next Tuesday and Wednesday.
Higher interest and rising inflation both hurt bonds, which pay a fixed rate of return over a long period.
In other trading, short-term Treasury securities fell 1/8 point to 5/32 point while intermediate maturities fell from 3/8 point to 21/32 point.
Yields on three-month Treasury bills were 5.79 percent as the discount rose 0.01 percentage point from Tuesday to 5.64 percent. Six-month yields were 6.17 percent, as the discount fell 0.01 percentage point from Tuesday to 5.91 percent. One-year yields were 6.13 percent as the discount rose 0.02 percentage point to 5.80 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, rose to 6.50 percent from 6.44 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 1/32 to 96 1/2. The average yield to maturity was 5.89 percent, unchanged from Tuesday.
AP-NY-06-21-00 1810EDT |
