FINANCIAL MARKETS : CREDIT : Bond Prices Edge Up in Quiet Trading
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Bond prices rose slightly in light pre-holiday trading. The Treasury’s benchmark 30-year bond rose 5/32 point, or about $1.60 per $1,000 face amount. Its yield fell to 8.38% from 8.40% late Monday.
Market participants shrugged off government announcements that a large supply of bonds would be sold into the market. Concerns that abundant supplies will depress prices have been on traders’ minds for weeks.
Resolution Trust Corp., the government agency in charge of bailing out the savings and loan industry, said it would sell $5 billion of 30-year bonds on July 10.
Kathleen Camilli, chief economist for Ramirez Capital Consultants Inc., said fears of oversupply in the market have been “overridden by expectations that the Fed will ease” interest rates later in the summer.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.313%, down slightly from 8.375% late Monday.
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