Bond Yields Drop as Fed Begins its Meeting

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July 26, 2016 7:24am NYSE:TLT

federalreserveYields on U.S. Treasuries were falling on Tuesday morning, as the Federal Reserve Open Committee kicks off its regularly scheduled two-day meeting.

Not a single analyst believes the Fed will adjust interest rates higher stemming from this meeting, but market watchers will be keen to see how the committee adjusts its language regarding its wider economic outlook. The post-meeting statement supposedly provides clues regarding how policy will evolve moving forward.

With the entire Fed made up of similar-thinking dovish economists, however, you probably don’t need to read the meeting minutes to guess how they feel. Interest rates will continue to be lower for longer, and should the U.S. economy hit the skids, the Fed will inject as much money as possible to try and bring it back to life.

Such is the economic environment we live in, not just in the U.S., but around the globe as well.

The iShares Barclays 20+ Yr Treasury Bond ETF (NASDAQ:TLT) rose $1.00 (+0.72%) to $139.70 per share in premarket trading Tuesday. The TLT, which tracks the price performance of long-term bonds, has gained 15% this year amid a falling interest rate environment (because the price of bonds moves inversely to yields).


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