Long-Dated Treasurys Plunge On Fed's Inflation Assessment; Market Fears Policy Makers Aren't Aggressive Enough; Two-Year Notes Are Steady
Dow Jones Newswires</br></br>NEW YORK -- Long-dated Treasurys plummeted on fears that the Federal Reserve isn't acting aggressively enough to avert a rise in inflation. But two-year notes, which often weaken quickly amid concerns about Fed policy tightening, scarcely moved, reassured by the Fed's apparent pledge to move only gradually in raising interest rates.</br></br>"The market doesn't agree with the Fed's assessment" on inflation, said Gerald Lucas, head of U.S. Treasury and agency strategy at Banc of America Securities.</br></br>After concluding its meeting yesterday, the Fed's policy setting Federal Open Market Committee said in a statement that "at this juncture, with inflation low and resource use slack, the committee believes that policy accommodation can be removed at a pace that is likely to be measured."</br></br>That was "a very, very benign statement," said Bill Quan, economist at Mizuho Securities in Hoboken, N.J.