Shorter-Dated Issues Firmer on Fed Outlook

Greenspan's rate cut steepened the curve on the long end, but the short end rose amid signs the Fed may not be done easing

Not only did the Fed buy the market another round of drinks, but it didn't even take the punch bowl away. But Treasuries were hardly drunk with happiness. Indeed, the long bond tripped hard, falling more than a point as curve steepening trades were revived. The Fed's 50-basis-point rate cut and asymmetric bias Tuesday hardly surprised, but the lack of a clear signal that rate cuts were on their way out boosted the short end at the expense of the bond.

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