Physician's Money DigestJune15 2003
Volume 10
Issue 11

The recent rally in stocks hasn'tcoincided with a rally in USTreasuries at all. In mid-May, theyield on the 10-year Treasury bondhit 3.519%, the lowest level sinceAugust 1958.The 30-year bond yielddropped to 4.509%, the lowest sincethe bond was first regularly issued inthe 1970s. Bond prices, which movein the opposite direction from yields,were up sharply. Bond buying of thismagnitude is often a harbinger offinancial panic, but experts believethat the force behind the continuingbond rally is the prospect of lowinflation and low interest rates for theforeseeable future. Many on WallStreet expect that the FederalReserve will keep rates low and mayeven put another rate cut into placeat its June policy meeting.

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