WASHINGTON -- Thre is still plenty of room for the bond market to move to higher ground and bring interest rates down, even though the Federal Reserve declined to ease monetary policy Friday, financial analysts say.

The Fed drained reserves from the banking system when the federal funds rate was trading at around 5 1/8% by conducting four-day matched sale-purchase agreements with dealers. The action was seen in the market as a "rate protest" -- a clear signal that Fed policymakers are still targeting a funds rate of 5 1/4%.

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