Treasuries Gain as Stevens Comments Raise Concern on Economy

Photographer: Andrew Harrer/Bloomberg

The Federal Reserve, which has been buying $45 billion of Treasuries and $40 billion of mortgage bonds each month to put downward pressure on borrowing costs, will probably start reducing the purchases in September, based on Bloomberg News surveys of economists. Close

The Federal Reserve, which has been buying $45 billion of Treasuries and $40 billion of... Read More

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Photographer: Andrew Harrer/Bloomberg

The Federal Reserve, which has been buying $45 billion of Treasuries and $40 billion of mortgage bonds each month to put downward pressure on borrowing costs, will probably start reducing the purchases in September, based on Bloomberg News surveys of economists.

Treasuries rose after Australia’s central bank Governor Glenn Stevens said there’s room to lower local interest rates, triggering concern the health of the global economy may fall short of expectations.

Benchmark U.S. 10-year yields fell two basis points, or 0.02 percentage point, to 2.58 percent as of 1:44 p.m. in Tokyo, Bloomberg Bond Trader data showed. The price of the 1.75 percent note due in May 2023 rose 5/32, or $1.56 per $1,000 face amount, to 92 26/32.

The Reserve Bank of Australia “is talking about the possibility of cutting rates,” said Kim Youngsung, the head of fixed income in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor with the equivalent of $101.4 billion in assets. “After that, fixed income prices went up. People are worried about a slow economic recovery.”

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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