Department of Treasury stopped issuing the 30-year Treasury bonds
, the rates declined significantly causing an overstatement of the magnitude of the obligation which translated to a much higher cost for employers and/or lowering of benefits prospectively for many employees covered by defined benefit plans.
However, the Department of the Treasury stopped issuing new 30-year Treasury bonds
In 1991, for example, a peak amount of $47 billion of 30-year Treasury bonds
was auctioned by the U.
Long-Term's basic strategy was to bet on the eventual convergence between the prices of extremely similar assets (the archetypal case being 30-year Treasury bonds
issued today, "on the run," and the same bonds issued six months ago, "off the run").
Because the outstanding 30-year Treasury bonds
carry higher yields than the current market yield on comparable securities, the department paid sellers $318 million in premiums to cash in early.
The yields on the 30-year Treasury Bonds
began to turnaround in mid-February, right on the heels of the Federal Reserves last cut of a quarter percent in short term rates.
Third, yields range from 100 to 200 basis points higher than short-term Treasury notes, and sometimes even exceed the rates on 30-year Treasury bonds
It was the era when 30-year Treasury bonds
were yielding 14% to 16% and local banks were offering returns of 9% on certificates of deposits (CDs) and money-market accounts.
The exchange currently maintains markets for futures and options on 2-, 5- and 10-year Treasury notes and on 30-year Treasury bonds
The current discount rate, based on 30-year Treasury bonds
, overstates the funding necessary to meet plan benefit obligations.
Yields on 30-year Treasury bonds
dropped soon after Wednesday's inflation report, and closed at 6.
Eurex US, located in and operating out of Chicago, will begin trading at 7 pm CST on February 8 and will initially offer trading in futures and options on 2-, 5- and 10-year Treasury notes and on 30-year Treasury bonds