Asia Times Online, 23 Mar 2009, Antal E Fekete
The United States Federal Reserve delivered another handsome gift to the bond bulls on Wednesday, March 18, with the announcement that the Fed's Open Market Committee has made a unanimous decision for the US central bank to buy US$300 billion in long-term Treasury bonds and notes over the next six months.
The yield on the 30-year Treasury bond immediately fell from 3.8% to 3.5%, while the yield on the benchmark 10-year Treasury note fell more, from 3% to 2.53%, increasing the price of the note by 42/32, the biggest one-day rise in years. The gift of risk-free profits is granted to the bond bulls courtesy of the Fed, in telling them in advance about its intention of buying long-dated government debt.
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