Treasury rates jump after Fed's move

MsMorrisine

$7.23Billion spent

MsMorrisine

$29.039 Billion offered

jmski52

FIRST STEPS: The Federal Reserve put its latest stimulus plan into action, buying $7.23 billion in Treasurys with the aim of lowering long-term interest rates. But instead of sinking, interest rates jumped.

WRONG WAY: The yield on the 10-year note hit 2.78 percent, the highest since Sept. 10. The two-year yield, which had hovered around 0.40 percent for months, rose to 0.51 percent, a large jump.

WHAT HAPPENED: Traders offered plenty of reasons for the turmoil. Foreign central banks weren't buying as they usually do. And European debt fears eased, making Treasurys less appealing.


If rates jumped, that means that the prices paid for the Treasuries were lower, and the proceeds were less than hoped. Should we be surprised that there were fewer buyers at dirt-bottom rates?

This means that the government is getting even more squeezed for cash, given the lower tax revenues.

So, is the economy getting better as we have been told?

Sinclair is right. They will inflate in a serious way. Heck, they've already been rationalizing it publically for a few weeks.

jmski52

Can you imagine how ticked off the real owners of these low interest rate bonds will be if/when rates rise? Ticked off enough to dump them, I suppose?

Unless those same owners are taxpayers. And retirees. The ones who simply can't run fast enough or far enough away from them.

Be careful what you own.