FINANCIAL MARKETS : CREDIT : Bond Prices Decline in Quiet Trading
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Bond prices slipped Thursday in light trading, with little economic news to affect the direction of the market, traders said.
The Treasury’s benchmark 30-year bond fell 7/32 point, or about $2.19 for every $1,000 in face amount. Its yield, which rises when the price declines, rose to 8.59% from 8.57% late Wednesday.
Late in the day, the Resolution Trust Corp. announced plans to borrow $45.3 billion for its savings and loan bailout in the current quarter. The RTC’s oversight board, a panel led by the Treasury Department that controls the policy and purse strings of the program, said it has authorized regulators to borrow up to $45.3 billion in the April-June quarter. It had authorized $11 billion in the January-March period.
Economists caution that the heavy borrowing could unsettle debt markets and nudge up short-term interest rates.
The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.125%, unchanged from late Wednesday.
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