Treasury 30-Year Bonds Tumble as Fed Purchases Other Securities

Treasury 30-year bonds fell the most in two months after the Federal Reserve said it will buy fewer of the securities than anticipated by investors in its $600 billion program of purchases to boost the economy.

The difference between rates on 30-year bonds and Treasury Inflation Protected Securities touched the widest since May 2008 on concern the Fed will be successful in reigniting inflation. The Fed said in a statement at the end of a 2-day Federal Open Market Committee gathering that it will make 4 percent of its purchases in the 17- to 30-year sector. In its first round of purchases, ended in March, the Fed bought $1.7 trillion in securities, including $300 billion in Treasuries, in an effort to spur economic growth strong enough to lower unemployment from near a 26-year high.