U.S. 10-Year Notes Headed for Biggest Weekly Drop in Four Years

Bloomberg (04/18/08); Worrachate, Anchalee
With traders lowering their wagers on how far the Federal Reserve will slash interest rates, U.S. Treasury 10-year notes are headed for their biggest weekly decline in more than four years. Speculation is running rampant that the Fed will reduce its target rate by 0.25 percent at the end of this month rather than the 0.50 percent that traders expected a month earlier. Nick Stamenkovic, fixed-income strategist at RIA Capital Markets Ltd., states, "A combination of signs that the financial market is stabilizing and hawkish comments from policy makers put Treasuries on the defensive this week. Bonds may fall further in the near-term, and I see that as a buying opportunity.'' Treasuries, meanwhile, rose earlier on speculation that Citigroup Inc. will post additional losses linked to U.S. subprime-mortgage defaults.