Treasuries dropped for a second day before a government report on Feb. 7 that’s forecast to show nonfarm payrolls increased in January, boosting the case for the Federal Reserve to keep reducing its bond purchase program.
Treasuries slid, sending 30-year yields to the highest level since May, amid increased criticism of the Federal Reserve’s plan to stimulate growth and concern that a swelling U.S. deficit will lead to higher borrowing costs. U.S. stocks erased gains and the dollar rallied.
Treasuries fell, pushing 10-year note yields toward the highest level in a week, before the Federal Reserve decides at a two-day meeting whether to start slowing bond purchases used to keep borrowing rates low and sustain the economic recovery.
Treasury 10-year notes gained for the first time in five days as yields at almost a two-year high drew buyers betting the securities have already priced in an improving U.S. economy and an end to Federal Reserve bond purchases in 2014.
Rates on Treasury bills maturing in November and December jumped for a second day as officials in Washington worked on a short-term budget agreement that may push the possibility of a default back six weeks.