Treasuries Fall as Fed Plan Boosts Inflation Indicators
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Treasuries tumbled, pushing 30-year bond yields to the biggest weekly jump in three years, as the Federal Reserve’s pledge to keep adding stimulus even as the economy strengthens fueled concern inflation will accelerate.
The yield gap between long bonds and comparable Treasury Inflation Protected Securities, an indicator of traders’ outlook for consumer prices over the life of the debt, widened to the most in 13 months after a report showed the cost of living in the U.S. climbed in August by the most in more than three years. Relative yields on mortgage securities tumbled to the lowest on record after the Fed said yesterday it would expand its holdings with monthly purchases of $40 billion of the debt.