Treasury prices Monday inched higher after the Federal Reserve bought close to $9 billion in bonds.
The price of the 10-year Treasury note edged up 12.5 cents. Its yield, which moves in the opposite direction, edged down to 3.39 percent from 3.40 percent late Friday.
The Fed bought $8.9 billion in five- and six-year notes. The central bank also bought $8 billion worth of bonds on Friday. The purchases are part of the Fed's $600 billion bond-buying program which was launched in November to keep interest rates low and encourage lending.
Treasurys have been in a relatively narrow range since the start of new year. Yields had spiked in the last two months of 2010 on expectations of faster economic growth.
Bond strategist at IDEAGlobal Josh Stiles said the Treasury market has been caught between two forces.
"On the one hand the Fed has an extremely easy policy of cheap financing, which prevents much of a sell-off," said Stiles. "But the economy is getting stronger, so the question is how much longer can the Fed keep the rates so low and that's kept the bulls from buying."
Traders tend to invest in low-risk Treasurys when the economy seems weak. Investors have been shifting money out of Treasurys and into stocks since late November.
In other trading, the price of the 30-year note rose 15.6 cents per $100 invested, keeping its yield flat at 4.56 percent from late Friday. The yield on the two-year Treasury note was up slightly to 0.62 percent from 0.61 percent.
The yield on the three-month Treasury bill was unchanged at 0.15 percent. Its discount was 0.16 percent.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Treasury Prices Edge up After Fed Buys $8.9B Bonds - ABC News
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