Treasurys Rise Slightly, Unfazed by Fed Remarks; Investors Convinced Rates Will Remain Unchanged Through Rest of the Year
U.S. Treasury prices rose moderately as investors shrugged off comments by Federal Reserve officials that did little to change the prevailing view of a central bank on hold for the rest of the year.</br></br>Data on New York state manufacturing, which showed stronger-than- expected activity, also left little mark on Treasurys.</br></br>"I think everybody now understands where the Fed stands," said Rick Klingman, managing director of U.S. rates trading for ABN Amro in New York, referring to the Fed's focus on inflation risk. "While we may get Fed speakers this week, I don't think that will shake the market up," he said.</br></br>Federal Reserve Bank of St. Louis President William Poole said the inflation rate is too high, but "my best guess is that inflation is likely to be tapering down." He added that "the inflation news has been slightly more positive" of late. Lower energy prices are likely aiding this improvement, he said.</br></br>San Francisco Fed President Janet Yellen said it makes sense to keep rates on hold "for a time" as the 17 increases work their way through the economy.