Aug
06

Wall Street Banks Amass Treasuries Undeterred by Coming Fed Hike

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Wall Street’s biggest bond dealers are amassing the most Treasuries since March last year, even as the Federal Reserve prepares to raise interest rates as soon as next month.

JPMorgan Chase & Co., Citigroup Inc. and the 20 other companies that trade with the Fed increased their holdings for a fourth week to a net $69 billion in data reported Thursday. Traders see even odds of a first rate increase since 2006 in September before a report Friday forecast to show U.S. employers in July added more than 200,000 jobs for the fifth month this year.

Investors have been encouraged by Fed Chair Janet Yellen’s stated intention to raise interest rates at a gradual pace, which has been backed by the collapse in oil prices. Tumbling inflation expectations have also stoked demand for Treasuries. The gap between two- and 30-year yields — known as the yield curve — compressed to the narrowest since April this week…

Wall Street Banks Amass Treasuries Undeterred by Coming Fed Hike

 

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