Impact of Fed Announcement on Treasuries

As of 9:30 AM
3m T-bill +10bp to 1.45%
2y US Treasury Note +22.5bp to 1.71%
5Y +22bp to 2.59%
10y +11bp to 3.56%
30y +4bp to 4.50%
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Treasuries Decline as Fed to Accept Agency Debt as Collateral
2008-03-11 08:58 (New York)
By Sandra Hernandez
 March 11 (Bloomberg) -- Treasuries fell, pushing the two-year note's yield up the most since July 1996, as the Federal Reserve's move to relieve the credit crisis prompted investors to dump holdings of government debt. Shorter-term notes led the decline as the central bank said it will allow securities firms to pledge agency and private mortgage debt as collateral against as much as $200 billion in Treasury securities. Investors and securities firms have been hoarding government debt, considered the safest and most easily traded securities, amid the credit crunch. ``This is obviously very good news,'' said James Caron, head of U.S. interest-rate strategy at Morgan Stanley in NewYork. ``They're providing liquidity to those who need it the most.'' The two-year note's yield climbed 27 basis points, or 0.27percentage point, to 1.77 percent at 8:56 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of 2 percent security due February 2010 dropped 17/32, or $5.31 per $1,000 face amount, to 100 14/32.
--Editors: Dennis Fitzgerald, Dave Liedtka