Summary Box: Interest rates drop; Expections rise that the Fed will step into the market

By AP
Tuesday, September 14, 2010

Summary Box: Treasury yields are falling

GOOD NEWS: Retail sales rose 0.4 percent in August, better than expectations. That would normally send bond prices down, but not Tuesday.

TREASURYS UP: Treasurys gained ground. The benchmark 10-year note climbed, sending its yield to 2.67 percent. The 30-year yield fell to 3.79 percent. Higher bond prices lower yields.

BUT WHY? Explanations abound for the Treasury’s market’s strength. The most notable: traders betting that the Federal Reserve will buy more Treasurys to lower long-term rates even further.

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