BLBG: U.S. Treasuries Rise as Obama Warns of Worse Slump, Stocks Fall
Treasuries rose amid a drop in stocks as President-elect Barack Obama said that the U.S. risks sinking deeper into an economic crisis.
Ten-year notes gained before the Treasury Department sells $16 billion of the securities, following a record $30 billion three-year auction yesterday. Goldman Sachs Group Inc. and Pacific Investment Management Co. said there is no bubble in the Treasury market, even as investors debate buying bonds with yields near record lows. Obama, in a speech at Fairfax, Virginia, urged quick passage of a $775 billion stimulus plan.
“People are afraid that the economy is not going to recover sooner rather than later and will spiral down,” said Andrew Richman, who oversees $10 billion in fixed-income assets as a strategist in West Palm Beach, Florida, for SunTrust Bank’s personal asset management division. “There will be an appetite for Treasuries, but how strong will be based on the fear factor.”
The benchmark 10-year note yield fell three basis points, or 0.03 percentage point, to 2.46 percent at 12:12 p.m. in New York, according to BGCantor Market Data. The 3.75 percent security due in November 2018 rose 10/32, or $3.13 per $1,000 face amount, to 111 6/32. The two-year note yield declined two basis points to 0.80 percent.
