- Last Updated Wed, May 09, 2007 at 11:59 PM EST - by Rob Hain

Fed Holds Rates, But Statement Surprises
The FOMC, the body responsible for setting short-term rate policy, decided, as expected, to hold the Fed Funds Target Rate at 5.25%. However, the language in their release announcing their decision matched the language in previous releases. Traders widely expected to see an acknowledgement of a softening economy and some indication that rates may be headed downward in the future. Without this reassurance, prices fell, taking yields up significantly. By the end of trading, the 10-year Treasury yield was up four basis points, landing at 4.67% by the end of the day.

The next release will be Jobless Claims, Import Prices, and the Trade Balance at 8:30 Eastern.

News:

Fed Will Keep 5.25% Until Definitive Data Shift: John M. Berry - Bloomberg

- Last Updated Tue, May 08, 2007 at 4:07 PM EST - by Rob Hain

10-year Auction Results Relatively Strong
Tuesday`s auction of $13 billion in 10-year Treasury bonds brought relatively strong demand, with indirect participation at 44.3%.

Bond Yields Rise
While MBS prices held relatively steady, Treasuries yields pushed up slightly, taking the 10-year yield back near where it closed on Monday - at 4.63%.

The next economic news item will be the Fed`s short-term rate decision at 2:15 Eastern on Wednesday.

News:

10-year Treasury auction attracts decent demand - MarketWatch

- Last Updated Fri, May 04, 2007 at 3:31 PM EST - by Rob Hain

Wednesday
The FOMC will announce their short-term rate decision at around 2:15 Eastern.

Thursday
Weekly Jobless Claims are due out at their usual 8:30 Eastern time, along with the Trade Balance and Import Prices.

Friday
Producer Prices and Retail Sales will compete for attention at 8:30 Eastern.

- Last Updated Fri, May 04, 2007 at 3:23 PM EST - by Rob Hain

During the heavy economic news week of April 30, the 10-year Treasury yield moved up slightly, ending the week at 4.64%.

Monday
Personal incomes rose, but spending declined. The Core PCE held flat. Chicago manufacturing disappointed the markets, and Construction spending barely moved. 10TSY close: 4.63%

Tuesday
Nationwide manufacturing showed strength after a long lull, but pending home sales fell almost 5%. 10TSY close: 4.64%

Wednesday
Factory orders made a decent, but not overwhelming, showing. 10TSY close: 4.65%

Thursday
Weekly Jobless Claims fell once again, and productivity increased though at a slower pace. The services sector showed remarkable strength. 10TSY close: 4.67%

Friday
Payrolls growth was disappointing, and the unemployment rate edged higher. 10TSY close: 4.64%