Bond Prices Decline as Yields Surge

[Joanne98]

Source: NYT

Prices on Treasury bonds fell sharply and yields surged to their highest levels in six months on Wednesday as extension of the Bush tax cuts fueled concerns over inflation and the government’s deficit. Equity indexes traded within a narrow range in Europe and on Wall Street.

The intense sell-off also raised questions about demand for $21 billion in 10-year notes sold on Wednesday and $13 billion in 30-year bonds to be auctioned on Thursday.

The higher yields could mean increased borrowing costs for the American government. Weighing on the auctions was the disappointing demand for $32 billion in three-year notes on Tuesday.

“This tax agreement is a disaster for the U.S. fiscal situation,” Howard Simons, strategist at Bianco Research in Chicago, said.

For consumers, the increased bond yields could eventually mean higher rates for home mortgages, which have already been rising in recent weeks.



Read more: http://www.nytimes.com/2010/12/09/business/09markets.html?src=twrhp

[Roland99]

1. Perhaps I was wise to follow my gut after all

and buy a house this past summer.

[dkofos]

2. It's just the world telling BO he f_cked up

AGAIN

[FailureToCommunicate]

3. Thanks for making Chinese banks happy, Mr President.

This will suck for a long long time.