Treasuries gained, pushing 10-year note yields to the lowest level in five days, as a gauge of consumer confidence fell more than forecast this month, fueling demand for the safety of U.S. government debt.
Treasury 10-year notes fell for a second week in the first back-to-back losses this year amid bets the Federal Reserve will push on with bond-buying cuts, viewing the strength of the economy as being masked by harsh weather.
Treasuries fell, pushing the 10-year yield up from almost a two-month low, before the Federal Reserve begins a two-day meeting tomorrow and the U.S. sells $111 billion of notes and floating-rate debt this week.
Treasury 10-year note yields fell to the lowest level in two months as investors sought a haven from emerging-market turmoil even as the Federal Reserve announced plans for a second reduction in its bond-buying program.
Treasuries rose, pushing the yield on the 10-year note lower for a second day, as Federal Reserve Bank of Boston President Eric Rosengren said the central bank should cut stimulus “only gradually” as the economy recovers.
The extra yield that investors demand to hold 10-year notes instead of three-year debt fell from almost the highest level since 2011 as investors assess the Federal Reserve’s case for additional stimulus tapering.
Treasuries rose for the first week this month as Federal Reserve Chairman-nominee Janet Yellen said she backs the central bank’s unprecedented stimulus program as long as the economy is sluggish, boosting demand for the debt.
The collapse in price swings of U.S. government debt to a four-year low shows increasing investor confidence that yields will stay at about record lows amid growing competition for a dwindling supply of the safest assets.