BOND REPORT: Treasury Yields On Track To Decline For 3rd Day
February 24 2017 - 9:34AM
Dow Jones News
By Joseph Adinolfi, MarketWatch
Uncertainty surrounding fiscal, monetary policy outlooks entices
investors back into U.S. debt
Treasury yields were on track Friday to decline for a third day
as investors bought back into bonds after Federal Reserve officials
sounded reluctant to raise interest rates in at its coming
meeting.
The yield on the 10-year Treasury note dropped two basis points
to 2.352%, its lowest level since Feb. 9. The yield on the two-year
note slid 1.1 basis point to 1.173%. The yield on the 30-year bond
shed 2.8 basis points to 2.985%.
In minutes from the Federal Reserve's most recent two-day
policy, which were released on Wednesday, officials agreed that
President Donald Trump's fiscal policies remained a wild card,
though short-term risks to the economy appeared balanced.
Treasurys sold off sharply following Trump's Nov. 8 electoral
victory, in part due to the expectation that his administration
would move swiftly to pass sweeping economic reform measures,
including corporate tax cuts, increased infrastructure spending and
deregulation. Now, investors have begun to second-guess those
moves, market strategists said.
Despite assurances from Treasury Secretary Steven Mnuchin that
the administration would enact its tax-reform plans before
Congress's August recess, the lack of details surrounding Trump's
plans has helped support the battered bond market.
Growing tensions between Mexico and the U.S. have also helped
entice investors back into safety plays like Treasurys, said
Karissa McDonough, fixed-income strategist at People's Bank.
Secretary of State Rex Tillerson and Department of Homeland
Security Secretary John Kelly visited Mexico earlier in the week
and emphasized their desire to maintain cordial relations between
the two neighboring countries.
"There really is demand for stability and safety when it's not
super clear if there's going to be a border-adjusted tax or how
relations will be carried out with other sovereign nations,"
McDonough said.
Later Friday morning, investors will digest the University of
Michigan's consumer-sentiment survey, as well as comments from
Trump, who is slated to speak at the Conservative Political Action
Conference.
(END) Dow Jones Newswires
February 24, 2017 09:19 ET (14:19 GMT)
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