Finance and Forex Trading Forum

AP / JOE BEL BRUNO, AP Bu · Guest

NEW YORK (AP) -- Treasury prices fell Wednesday on new
concerns about inflation and last-minute bets before a $21 billion
sale of long-term government debt.
Prices lost ground as the Treasury Department prepared to
sell $15 billion in 10-year notes during the afternoon. That will be
followed by $6 billion of 30-year bonds on Thursday.
Government debt also came under pressure after Kansas City
Federal Reserve Bank President Thomas Hoenig said inflation may
force the central bank to raise interest rates. Hoenig, who is not a
voting member of the Fed's Open Market Committee, said he's
concerned by persistent gains in food and energy prices.
The central bank lowered interest rates a quarter point last
week. Some economists thought policymakers were looking to take a
break from their rate-cutting campaign to better focus on fighting
inflation.
Meanwhile, crude oil prices touched a new high of $122.81 a
barrel on the New York Mercantile Exchange. Oil prices have doubled
over the past year, causing the price of gasoline and just about
everything else in the economy to rise and weighing on cash-strapped
U.S. consumers.
The benchmark 10-year Treasury fell 1/32 to 96 18/32 and
yielded 3.92 percent, up from 3.90 percent late Tuesday, according
to BGCantor Market Data. Prices and yields move in opposite
directions.
Meanwhile, the 30-year long bond fell 6/32 to 95 22/32 and
yielded 4.66 percent, up from 4.64 percent late Tuesday.
The 2-year note fell 2/32 to 99 16/32 and yielded 2.39
percent, up from 2.37 percent late Tuesday.
"We're watching energy quotes very closely, they are kind of
in their own world," said Jay Mueller, an economist with Strong
Capital Management. "We continue to follow the lead of the equity
market ... and right now there is no big evidence, one way or
another, if the worst of the financial crisis is behind us."
Major stock indexes fell Wednesday, with investors finding
little encouragement from oil's march higher and the latest batch of
economic data.
The Labor Department report showed higher-than-expected
figures on non-farm labor productivity, suggesting inflation
pressures may be letting up. However, the National Association of
Realtors said pending sales of existing homes fell in March by 1
percent, more than many economists predicted.