Bond investors are growing more convinced that Federal Reserve Chairman Ben Bernanke will push Treasury yields down to the levels of the 1950s with another round of asset purchases.
Goldman Sachs Group Inc. and Pacific Investment Management Co. project the Fed will resume quantitative easing by purchasing U.S. government debt as soon as this year to prevent what they see as a 25 percent chance the economy will slip back into a recession. Bank of America Corp. says the central bank will send the 10-year note yield to a record low of 1.75 percent in the first quarter of 2011.
Derivatives show investors are betting on lower yields at a rate not seen since the Fed began buying Treasuries in March 2009, even after companies in the U.S. added more jobs than forecast and manufacturing expanded faster than estimated in August. Policy makers are attempting to push borrowing costs lower and investors into higher-yielding assets such as corporate debt to help sustain the expansion and spur hiring. (more)
No comments:
Post a Comment