Government Bond Prices Edge Lower In Quiet Trading as Corporates Gain
NEW YORK -- U.S. government bond prices edged lower yesterday in lackluster trading.</br></br>Some long-term Treasury issues declined by about 1/4 point, or around $2.50 for each $1,000 face amount of securities. Government bond prices had risen more than 1 3/4 points in the previous two trading days.</br></br>Yesterday's setback partly reflected a decline by the dollar in the foreign-exchange market and a slight rise in oil prices. Corporate bond prices rose despite a flurry of new issues. Municipal bond prices also moved higher.</br></br>Investment managers generally continue to expect interest rates to fall in coming months. They expect the economy to remain sluggish, prompting the Federal Reserve to ease credit soon.</br></br>"The economy will be weak this year," said Elliott Platt, senior vice president and economist at Donaldson, Lufkin & Jenrette Inc. He predicts business activity will grow 1 1/2% to 2% after inflation this year, compared with about 2.6% in 1986.