Q1 2006
By John Schroy, on June 28th, 2006 |

Although foreign investors continue to be the largest purchasers of most types of US bonds, this sector showed less interest in treasuries than in the past, shifting assets into short-term repurchase agreements in Q1 2006. If the Federal Reserve continues to push short-term interest rates upwards and if foreign investors continue to move into short-term fixed investments, such as repurchase agreements, long-term interest rates may be forced higher.
Q1 2006
By John Schroy, on June 28th, 2006 |

Net issuance of bonds into the US market in Q1 2006 surpassed prior records, forcing bond prices to fall and rates to rise.
The bond market was moved by seasonal factors, the return of Fannie Mae, and corporate demand for funds to finance stock buybacks.
Total, annualized net sales for corporate and foreign bonds, agencies, treasuries and municipal bonds reached $2.2 trillion, 70% higher than bond issuance in 2005.
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