Futures in the 30-year bond became a hot commodity at the CBOT.
If you think bond mutual funds are supposed to keep your savings safe, you may not like what you see when you examine your next statement. By diverting money into private accounts, the government could be forced into heavy borrowing to cover the system's required payouts. Johnson, a longtime bond trader and chief executive of fund manager Boston Cabot LLC, said he's surprised the federal government held out as long as it did. Consequently, in an environment like the present one, when strategists are expecting somewhat higher interest rates, investors need to be cautious if they will need money soon. He said the country needs the bonds to compete with the debt of European countries, which have issued 50-year bonds to widespread acceptance.
In an about-face, the Treasury Department said it is considering whether to re-issue 30-year bonds, an old reliable to many investors, so the government can cover record deficits. The day's top stories e-mailed to you each weekday. At that point, investors wouldn't want your 4 percent bond, so it would drop in value. The exchange estimated trading totaled more than 675,000 contracts Wednesday, 80 percent higher than the average daily volume posted this year.
Futures in the 30-year bond became a hot commodity at the CBOT. In frantic trading Wednesday, the yields briefly rose to more than 5 percent. If the bonds return, they'll be sold in six-month intervals starting with next February, he said. District Judge Rebecca Pallmeyer said before upholding an earlier decision to keep Patterson behind bars until his May 31 trial.