Treasuries Fall as Fed Easing Plan Drives Stocks Higher

Treasuries fell for a second day as the Federal Reserve’s decision to spur the U.S. economy with asset purchases sent stocks higher around the world.

U.S. government securities handed investors a 0.6 percent loss in the past month through Sept. 14, Bank of America Merrill Lynch indexes show. The MSCI All-Country World Index (MXWD) of shares returned more than 5 percent, including reinvested dividends, according to data compiled by Bloomberg. The Fed said on Sept. 13 it would buy $40 billion of mortgage-backed securities a month. The European Central Bank announced plans the week before to purchase debt in the euro area.

“The bias is for higher yields over the next month or two,” said Peter Jolly, Sydney-based head of market research for National Australia Bank Ltd. “We have seen some big sledgehammers from the ECB and, notably, the Fed that will encourage an economic recovery.”

Benchmark U.S. 10-year rates rose one basis points to 1.87 percent as of 7:48 a.m. in London, according to Bloomberg Bond Trader prices. The price of the 1.625 percent security due in August 2022 fell 2/32 to 97 3/4.

Benchmark 10-year yields climbed as high as 1.892 percent on Sept. 14, the most since May 10.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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