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NEW YORK (AP) - Treasury prices advanced Wednesday, as investors sought safe assets and downscaled their expectations for the Federal Reserve's plan to inject more liqudity into the financial markets..
The bond market was evaluating the Fed's plans for a series of auctions that will add as much as $200 billion in liquidity to the markets and allow stressed financial institutions to exchange undesirable mortgage debt for more secure Treasurys. The program was announced on Tuesday and sparked a massive equities rally and heavy losses for government bonds.
However, on Wednesday investors once more bought Treasurys as they tried to gauge the Fed program's chances for success. Many concluded that the new 28-day auctions will be helpful to a degree, as they will allow strained financial institutions to unload mortgage assets for which there have been almost no buyers.
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