January 2002: The Disappearance of the 30-year Treasury Bond
A Review of Economic Events that Made Headlines in 2001
On October 31, 2001 the U.S. Treasury gave traders in the fixed-income markets a Halloween surprise. It announced, without much warning that it would no longer auction 30-year bonds. Traders reacted with an historic buying binge of existing 30-year treasuries. In some ways the long bond`s demise was inevitable. It had been losing market influence throughout the latter part of the 1990s. While it is too early to gauge the ultimate impact of this seemingly dramatic change in the Treasury`s financing tool kit, many issues and questions arise for both the financial markets and the economy. Find out what led to the downfall of the king of the fixed-income markets and what the issues and implications might be for the economy.
