Bond prices edge up after Fed meeting

Bond prices for Treasuries rise after Federal Reserve says it will keep interest rates low. The rise in bond prices means interest rates are falling.

Frank Polich/Reuters/File
A trader in the 10-year bond options pit at the Chicago Board of Trade signals orders Nov. 3, 2010. After the Federal Reserve's statement April 27, 2011, that it would keep interest rates low, bond prices rose.

Government bond prices are rising after the Federal Reserve left short-term interest rates unchanged.

The Federal Reserve said Wednesday that it would leave short-term interest rates at a record low near zero percent. The Fed also said it would finish its $600 billion bond-buying program as scheduled in June.

The yield on the 10-year Treasury note dropped to 3.35 percent after the Fed released its statement, after trading at 3.37 percent minutes earlier. When bond prices rise, their yields fall.

The price of the 10-year note was still down 25 cents. The 10-year yield was trading at 3.32 percent late Tuesday.

In other trading, the yield on the 2-year note rose to 0.66 percent from 0.65 percent.

RELATED: 2011 forecasts for interest rates around the world

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