Greece said Finance Minister Evangelos Venizelos held “productive” discussions with European officials yesterday on the country’s bailout. Prime Minister George Papandreou’s government will hold another conference call today as European leaders debate the terms of a July agreement and the prospect of their being forced to send more money to keep Greece in the currency union.
Treasury 10-year yields were within 10 basis points of their all-time low of 1.8770 percent set last week as economists said the Fed will announce plans to buy longer-maturity debt at a two-day policy meeting that starts today.
The Federal Open Market Committee will decide to replace short-maturity Treasuries in its portfolio with longer-term bonds, according to 71 percent of 42 economists surveyed by Bloomberg. The move is known as Operation Twist for its goal of bending the yield curve.
“Operation Twist will be something that will lower longer-dated rates,” said Orlando Green, a fixed-income strategist at Credit Agricole SA in London. “It could boost equities or boost sentiment and re-inflate asset prices. That’s the desire. Whether it will do this is certainly debatable.”
