Treasuries Little Changed as Defaults Deepen U.S. Housing Slump

Treasuries are little changed, with the yield on 10-year notes holding below 5 percent for a third day, on concern subprime mortgage defaults will deepen a U.S. housing slump.

The bond markets' inflation expectations fell to the lowest since May 30 before reports tomorrow and the next day that may show existing and new home sales fell last month. The Treasury Department will sell $6 billion in 20-year inflation-protected securities today.

It may be a good time to sell Treasuries as yields have fallen too low relatively to the Fed funds rate, which looks like it will be kept unchanged at 5.25 percent this year.

It seems that the housing market is weak but consumers are still spending.

go figure?!

:-)