Bond Buyers Endorsing Bernanke’s Caution Unfazed by $100 Oil
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The market for U.S. Treasuries is embracing Federal Reserve Chairman Ben S. Bernanke’s view that signs of improving growth mask threats to the nation’s economy, keeping inflation in check.
Traders are betting that government debt yields will remain subdued in the years ahead, even with oil prices stuck at around $100 a barrel. The cost to exchange fixed- for floating-rate payments in a decade has averaged 3.38 percent this year. The so-called forward 10-year swap rate, which has fallen from last year’s peak of 5.47 percent in February, is trading at the same levels as early 2009.