Rush to Buy Bonds Sends Rates Down: Clinton Plan, Fall in Consumer Confidence Also Hurt Stocks, ]
Panic buying hit the bond market yesterday as investors, apparently convinced that interest rates are down to stay, scrambled to purchase bonds before yields fell any further.</br></br>In the process, rates on intermediate- and long-term U.S. Treasury securities were driven down one-tenth to two-tenths of a percentage point in a single day.</br></br>Levy, chief economist at CRT Government Securities Ltd. in New York. ÛÏThe whole fixed-income market has appreciated dramatically."</br></br>Levy said most financial market participants seem convinced that inflation will stay low and, perversely, that President Clinton's deficit reduction proposals will dampen rather than spur economic growth.</br></br>"Actually, the package does nothing to harm the economy in the short run,Û Levy said. Û÷It is clear sailing for economic growth."