Treasuries rose on Wednesday after investors had a change of heart regarding the Federal Reserve's move to boost lending to banks to ease the credit crisis may not work.
While investors yesterday initially cheered the plan by the Fed to inject additional liquidity into the banking system, they were less confident about the plan today, looking for safe-haven investments in government debt. The government said on Tuesday it would up to $200 billion of trade treasuries for a wider-than-usual variety of mortgages and mortgage-related debts.
Investors are betting that the Fed will reduce interest rates at its March 18 policy meeting to give an additional boost to the economy.
Two year treasuries rose 7/32 in price to yield 1.631 percent. Ten-year notes rose 10/32, or 3.477 percent.