Investors bet Fed will boost purchases of Treasuries

05/11/2009 | Bloomberg

Over the past seven weeks, Treasuries have slumped, pushing up bond yields and sending mortgage rates higher than 5%. BlackRock, Pioneer Investment Management and other major investors say the Federal Reserve will likely increase its purchases of Treasuries to rein in consumer borrowing costs. "The Fed needs to consider increasing its purchases of Treasuries," said Stuart Spodek, co-head of U.S. bonds at BlackRock. "We are still in a recession. It's quite bad. They need to stabilize long-term rates."

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