Treasury 30-year bonds tumbled, pushing yields to the biggest weekly increase since August 2009, on speculation that Federal Reserve efforts to spur the economy will reignite inflation.

By Daniel Kruger and Susanne Walker – Oct 16, 2010 at Bloomberg.com

EXCERPTS:

The 30-year yield rose above 4 percent yesterday for the first time in two months after data showed retail sales rose more than forecast and New York area manufacturing climbed. Fed Chairman Ben S. Bernanke said additional stimulus may be warranted, in part because inflation is too low.

Bernanke said yesterday the central bank could expand asset purchases, a strategy known as quantitative easing, or change the language in its statement to try to spur the economy.

The Fed previously acquired about $1.7 trillion of Treasury and mortgage-related debt to sustain the recovery, concluding the program in March.

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