Ready to Get Started? Get a Free Rate Quote Now.

The bond market struggled yesterday, with yields increasing in the afternoon as investors sifted through the effects of the Fed’s new bond-buying program.

Last week, the Federal Reserve announced plans to buy up $600 billion of Treasuries by the second quarter of next year.

Now, the market is “trapped” between the expectation of government debt purchases and foreign investors selling similar assets.

Investors now seem to be playing a waiting game and taking cues from the equity markets.

Demand for bonds remained high for Tuesday afternoon’s bond auction, in which the government offered $24 billion in 10-year notes. The bid-to-cover ration for the auction was 2.80, suggesting that demand remains robust.

On Wednesday, Treasury will conclude its auctions for the week by offering $16 billion in 30-year notes.

Bond markets will be closed on Thursday for the Veterans Day holiday.

The yield on the benchmark 10-year Treasury note moved higher to 2.66 percent Tuesday, from its close of 2.55 percent on Monday. Bond prices and yields move in opposite directions.

Yields for the 30-year bond increased to 4.25 percent, the 2-year note was up to 0.45 percent, and the 5-year note ticked up to 1.25 percent.

Ready to Get Started? Get a Free Rate Quote Now.

The Federal Reserve is facing some intense global criticism as leaders from around the world get ready to meet in South Korea on Wednesday.

Last week, the U.S. Federal Reserve said that it would pump another $600 billion into the nation’s economy through the purchase of long-term Treasuries, a move known as quantitative easing, or “QE2″ as it’s the second round of such measures.

The announcement has since elicited fears that it could reignite inflation pressures, cause a new global asset bubble or spark a “currency war” where nations devalue their own currencies to keep their exports competitively priced.

President Barack Obama will hear certainly hear some of those complaints when he arrives at the G-20 meeting in South Korea.

The harshest criticism so far came on Friday when German Finance Minister Wolfgang Schäuble told reporters that, “With all due respect, U.S. policy is clueless.”

“It’s not that the Americans haven’t pumped enough liquidity into the market,” he said. “Now to say let’s pump more into the market is not going to solve their problems.”

Schäuble elaborated in an interview with the German magazine Der Spiegel where he stated that the Fed’s move undermines attempts by the United States and Europe to get the Chinese to allow its currency to rise in value.

“It’s inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money,” he said in the interview.

Chinese officials have so far been more subtle with their criticism of the Fed’s move.

People’s Bank of China Governor Zhou Xiaochuan said the Fed’s move could be “a good choice” for the U.S. but might that it could contribute to global imbalances by devaluing the dollar and causing a flood of cash into emerging economies.

Ready to Get Started? Get a Free Rate Quote Now.

Baltimore mortgage rates mostly fell this week, with short-term adjustable-rate mortgage again hitting record lows, although the average on 30-year, fixed-rate mortgages edged up for the third straight week, according to Freddie Mac‘s weekly survey.

The short-term rates Freddie tracks—for five-year and one-year Treasury-indexed hybrid adjustable-rate mortgages—hit the lowest levels since the mortgage financier began tracking them in January 2005 and January 1984, respectively.

Rates have been slumping for months, setting record lows in the process, as yields on Treasurys slid amid economic uncertainty. Mortgage rates generally track yields, which move inversely to Treasury prices.

The 30-year fixed-rate mortgage averaged 4.24 percent for the week ended Thursday, up from the prior week’s 4.23 percent average but down from 4.98 percent a year ago. The average for 15-year fixed was 3.63 percent, down from 3.66 percent and 4.40 percent, respectively.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.39 percent, down from the prior week’s 3.41 percent and 4.35 percent a year earlier. One-year Treasury-indexed ARMs were 3.26 percent, dropping from 3.3 percent last week and 4.47 percent a year ago.