Treasuries Rally on Wall Street Woes
Treasuries posted a surprising rally Tuesday, seemingly undaunted by the impending Fed and Treasury announcements Wednesday. Instead, the focus was on a collapse on Wall Street as the key indexes fell over 3%. Shorter dated instruments outperformed. The yield on the two-year note dropped 20 basis points, overlooking expectations of a steady Fed policy stance Wednesday. Meanwhile, the five-year note shed about 20 basis points, ignoring concerns the Treasury will shift to monthly auction schedule. Helping to extend the gains was the 10-year note's break of 5%. The catalyst for Wall Street's woe was news of possible accounting skeletons in the closets of other high profile firms, including Tyco, Williams and Cendant.
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