The gap in yields between U.S. five- and 30-year Treasuries narrowed to the least in four years as traders speculated economic growth may be robust enough for the Federal Reserve to raise interest rates next year.
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 notes declined, after posting the biggest gain in two months last week, before the Federal Reserve begins a meeting that analysts said will see policy makers further scale back bond-purchase stimulus.
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 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 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.
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.