ClydeR
10-26-2010, 11:06 AM
The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction Monday as investors bet that the Federal Reserve will succeed in its bid to jump-start the faltering economy.
The securities drew a yield of negative 0.55 percent in a sale that was a reopening of an $11 billion offering in April.
More... (http://www.washingtonpost.com/wp-dyn/content/article/2010/10/25/AR2010102505111.html)
The Fed has indicated in recent weeks that it is preparing to take extraordinary steps to shore up the economy by purchasing large amounts of government debt, a tactic known as quantitative easing, which is aimed at lowering interest rates across the economy.
A negative yield suggests investors are betting that the Fed's intervention is likely to successfully prevent deflation and reduce the risk of the economy slipping back into recession.
I don't know who bid the Treasuries to a negative yield, but you would have to be a real dummy to do that. You'd be better off burying your money in the back yard than buying those.
The securities drew a yield of negative 0.55 percent in a sale that was a reopening of an $11 billion offering in April.
More... (http://www.washingtonpost.com/wp-dyn/content/article/2010/10/25/AR2010102505111.html)
The Fed has indicated in recent weeks that it is preparing to take extraordinary steps to shore up the economy by purchasing large amounts of government debt, a tactic known as quantitative easing, which is aimed at lowering interest rates across the economy.
A negative yield suggests investors are betting that the Fed's intervention is likely to successfully prevent deflation and reduce the risk of the economy slipping back into recession.
I don't know who bid the Treasuries to a negative yield, but you would have to be a real dummy to do that. You'd be better off burying your money in the back yard than buying those.