Bonds Tread Water As Fed Leaves Interest Rates Alone
May 02, 2011
Treasurys were flat Tuesday as the Federal Reserve Board did exactly what everybody expected: it left interest rates unchanged. The price of the benchmark 30-year bond was up 1/32, or less than $1.25 for a bond with a face value of $1,000, at 99 11/32 in late trading Tuesday. The yield, which moves in the opposite /direction of the price, was unchanged from late Monday at 6.79%. Bond prices were chained throughout the session to extremely narrow ranges as players awaited the outcome of the week's main event. Even when the Fed's policy making body, the Federal Open Market Committee, made its widely anticipated announcement around 2:15 p.m. EDT, prices failed to stray more than a few ticks from the previous day's levels. ``There was not so much as a ripple when that announcement came out,'' observed Patsy Anton, Treasury market analyst for CS First Boston Inc.. Many traders said the market had essentially priced in the outcome of the FOMC meeting at the beginning of the month, when key data -- including the July employment report -- led many to conclude that the Fed wouldn't tighten monetary policy at this month's gathering. ``The rally of no-Fed-tightening happened after the July employment numbers (on trader at a primary dealership said, noting that it was unrealistic to coax additional gains out of the market on such a widely expected move. ``The market was least anxious about this meeting,'' said Jimmy Garry, senior economist at Chase Securities. On the corporate bond market, Sprint Spectrum LP finally priced its restructured $523 million, two-part debt offering Tuesday, a full week after the company was originally expected to come to market. Mortgage-backed securities scored moderate gains Tuesday, beating the flat Treasury market. Municipal bonds were little changed Tuesday after yet another session dominated by new issue activity.
VastPress 2011 Vastopolis
