Bond Prices Rally After Morning Decline On Administration Call for Easing by Fed
NEW YORK -- The bond markets rallied late yesterday as the Reagan administration again urged the Federal Reserve System to ease its credit hold in order to bolster the growth of the nation's money supply.</br></br>Prices, which had been down earlier in the day, wound up little changed from Tuesday's closing levels. The early-session losses stemmed mainly from dealer nervousness over the federal government's huge financing needs.</br></br>The Treasury yesterday afternoon announced plans to sell $17.5 billion of new notes and bonds in its quarterly financing operation. The package consists of $6.5 billion of three-year notes to be auctioned Monday, $5.75 billion of 10-year notes to be sold Wednesday and $5.25 billion of 30-year bonds to be auctioned the following day.</br></br>The size of the package was slightly larger than the Treasury indicated in mid-October, when it released a tentative schedule showing only a $17 billion financing operation.</br></br>But concerns quickly faded after Beryl Sprinkel, undersecretary of the Treasury for monetary affairs, echoed recent administration statements calling for an easier Fed policy. "We think there is plenty of room for some easing of monetary policy," he told reporters at the Treasury's financing briefing. He warned that the money supply's recent sluggish growth could endanger the economic expansion.