PErts say foreign investors will likely scoop up Treasurys to fund a bank bailout. The bad news is that higher interest rates may be the price we pay.">

The world sticks with the U.S.

By Paul R. La Monica, CNNMoney
2008-9-23 13:11:27

NEW YORK (CNNMoney.com) -- The so-called "flight to quality" in the U.S. Treasury market apPEars to be over for now - bond prices are down and yields are up from lows touched last week.

But is the selling in Treasurys a good sign that companies and investors are willing to take risk again? Or does it mean that foreign central banks are losing faith in the U.S. economy as the government tussles over the $700 billion rescue plan - and all the potential liabilities that go with it?

Several bond exPErts said that while the fears about what's next for the banking sector are a major worry, they don't see foreign investors pulling out of Treasurys en masse.

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