New York: Treasuries posted their biggest four-week decline since December 2010 as signs economic growth is accelerating dimmed the likelihood the Federal Reserve will initiate another round of asset purchases.
Economic data on the job market, the housing industry and consumer purchasing and sentiment showed signs of faster growth, helping reduce haven demand to push benchmark 10-year Treasury yields to the highest level since May 11. The central bank will release minutes from its August 1 meeting where it declined to initiate a third round of monetary stimulus, a policy known as quantitative easing, or QE. Fed Chairman Ben S. Bernanke will address the Kansas City Fed’s annual conference on monetary policy at Jackson Hole, Wyoming, on August 31.
“The market’s saying there is no QE3,” said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York, one of 21 primary dealers that trade with the Fed. “Rates have backed up significantly. QE3 is off the table.”
The 10-year note yield rose 15 basis points this week, or 0.15 percentage point, to 1.81 percent, according to Bloomberg Bond Trader prices. The 1.625 percent note due in August 2022 dropped 1 13/32 or $14.06 per $1,000 face value to 98 9/32.