10-year yield slips after Fed details bond buys

chart_ws_bond_30yearyield.top.pngClick chart for more bonds data. By Charles Riley, staff reporter


NEW YORK (CNNMoney.com) -- Treasury yields turned lower Wednesday following a 30-year debt auction and after the Fed released details about its initial purchases under its bond-buying stimulus plan.

The yield on the benchmark 10-year note fell to 2.65% Wednesday, while the yield on the 30-year bond fell to 4.24%. The 2-year note edged down to 0.42%, and the yield on the 5-year note slid to 1.21%.

The Fed said it plans to purchase approximately $105 billion in Treasuries over the next month, with $75 billion of those funds coming from the $600 billion infusion announced last week, and an additional $30 billion originating from proceeds of its earlier investments.

Last week, the Fed announced it would buy $600 billion in long-term Treasuries over the next eight months. However, the majority of those scheduled purchases will be of bonds in the 2-1/2- to 10-year range. Only 4% of Federal purchases will be of bonds between 17 years to 30 years in duration.

"The Fed told us they were going to be buying in the belly of the curve, rather than at the wings," Kim Rupert, fixed-income analyst at Action Economics explains. "That might limit demand for the 30-year [note], because the Fed isn't going to be a big buyer in that section of the curve."

On Tuesday, the 30-year note's yield closed at 4.25% -- its highest level since June 3, 2010. Since yields and prices move in opposite directions, Treasury prices for the note hovered lower Wednesday.

Auctions: On Wednesday the Fed auctioned $16 billion in 30-year notes, an offering that was met by almost $37 billion in bids. The bid-to-cover ratio for the auction was 2.31, the lowest level of demand since November 2009.

On Tuesday, the government offered $24 billion in 10-year notes at auction. The auction followed Monday's sale of $32 billion in 3-year notes.

Bond markets will be closed on Thursday for Veterans Day. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.90%3.85%
15 yr fixed3.07%3.00%
5/1 ARM3.14%3.02%
30 yr refi3.96%3.92%
15 yr refi3.12%3.10%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,232.02 -53.72 -0.29%
Nasdaq 5,089.36 -1.43 -0.03%
S&P 500 2,126.06 -4.76 -0.22%
Treasuries 2.22 0.03 1.37%
Data as of 4:33pm ET
Company Price Change % Change
Bank of America Corp... 16.75 0.02 0.12%
Apple Inc 132.54 1.15 0.88%
Hewlett-Packard Co 34.76 0.93 2.75%
AT&T Inc 34.71 -0.36 -1.03%
Microsoft Corp 46.90 -0.52 -1.10%
Data as of May 22

Sections

Remember when Comcast, the nation's largest cable operator, tried to buy Time Warner Cable? Now Charter, the third largest, is poised to do so. More

The True Cost, a new documentary, chronicles the evils of the clothing industry and asks us to stop buying so much cheap stuff More

Google filed a patent for a toy that will have sensors and cameras, and can control connected devices. More

Sarah Kauss launched S'well to rid the world of plastic water bottles. In five years, she's sold 4 million of her stainless steel bottles. More