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.
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.
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.
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.
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.