Berner Says 10-Year Bond Yields May Fall to 2.25% After Fed Easing Steps

The yield on the 10-year U.S. Treasury note may fall to 2.25 percent should the Federal Reserve renew large-scale asset purchases, said Richard Berner, co-head of global economics at Morgan Stanley in New York.

“I think we are already in a new rate regime,” Berner said in a Bloomberg Television interview on “Surveillance Midday” with Tom Keene. “I think the Fed is trying to make sure we don’t become Japan. That is really the effort.”

The Federal Reserve today will probably restart purchases of bonds to spur the economy with unemployment near 10 percent and inflation below its target, according to Bloomberg News surveys of economists. The Fed will likely pledge to buy $500 billion or more in securities, according to 29 of 56 economists surveyed.

The yield on the 10-year Treasury note fell five basis points to 2.54 percent at 12:24 p.m. today.

To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net; Tom Keene in New York at tkeene@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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