Once the Federal Reserve began purchases, yields on short-term Treasury securities fell rapidly with three month T-Bill yields falling more than two percent over the first half of the year. Fed purchases also relieved pressure in the market for longer-term treasury bonds, where the supply-demand imbalance for dollars had reached a breaking point amid large deficits and foreign reluctance to hold US assets. After rising above 4.3 percent in January, yields on ten-year treasuries fell below 3.5 percent over the next six months.
