San Francisco Federal Reserve President Mary Daly said on the 20th that it is too early to judge the impact of the Treasury Department's bond market support measures on the Federal Reserve's operations. In an interview with Bloomberg, when asked whether the Treasury's bond support measures could affect the Fed's ability to achieve its goals, Daly said, "It's still in the early stages, so I don't want to rush to a discussion before we've had a chance to fully examine it." She stressed that what matters is not the "mechanism" for achieving the Fed's goals, but the commitment to bringing inflation back to 2 percent. On the 19th, the U.S. Treasury announced it would double the size of its liquidity-support purchase operations for longer-dated nominal coupon securities from 2 billion dollars to at least 4 billion dollars per operation, prompting the 30-year Treasury yield to plunge from near its highest level in 19 years.
Treasury bond support measures and Fed comments affect bond yields; yield falls as bond prices rise.
