A couple graphs from this week's “Financial Highlights” from the Federal Reserve bank of Atlanta. The graphs are of European Bond Spreads, Federal Reserve Treasury Portfolio and U.S. Treasury Yields respectively:
We can take solace in that the Spanish and Italian spread with the bund has not spiked...
- Since the September FOMC meeting, the 10-year yield spread between Greek and German bonds has widened by 267 basis points (bps) and is 472 bps higher since September 30. The yield spreads for Portugal and Ireland have both tightened, by 83 bps and 52 bps, respectively. Spanish and Italian spreads are also down, by 52 bps and 31 bps, respectively.
Operation Twist
At the zero bound...
- As of September 22, 2011 39 percent of Treasury securities held by the Federal Reserve had maturities of six years or longer. After the maturity extension program concludes in June 2012, 63 percent are expected to have maturities of six years or longer.
- Increasing demand for longer-term securities through this program is expected to drive down the interest rate on longer-term Treasury Bonds. If the interest rate on longer-term Treasury Bonds falls, the cost of long-term borrowing more generally could also fall, encouraging investment by consumers and businesses.
- Since September 21, the 30-year Treasury bond yield is up 8bps to 3.11 percent, the 10-year is 30 bps higher to 2.18 percent, and the two-year is up 11 bps to 0.32 percent. The three- and one-month T-bill rates are both little changed at 0.02 percent and 0.01 percent, respectively.
Also this week's "Economic Highlights" from the Federal Reserve bank of Atlanta.
