Treasury 30-year bonds fell, widening the gap between yields on the securities and five-year notes from the least since 2009, as investors embraced a strengthening economy amid Federal Reserve stimulus withdrawal.
Federal Reserve officials agree that they must retool their guidance on when to consider raising interest rates. Chair Janet Yellen’s task is to forge a consensus on the new message from their disparate views.
Treasury 10-year note yields dropped to the lowest level in a week as a report showed manufacturing slowed more than forecast in February in the New York region, adding to speculation the U.S. economic recovery is faltering.
U.S. stocks rose, pushing benchmark indexes up from two-month lows, while Treasuries and gold fell as consumer spending climbed and corporate earnings beat estimates. The iShares MSCI emerging-markets exchange-traded fund rose and the dollar gained a fifth day versus the euro.
U.S. stocks fell, after the Standard & Poor’s 500 Index reached a record, as investors weighed federal budget negotiations and better-than-estimated economic data to gauge the timing of any Federal Reserve stimulus cuts.
Treasuries fell for the first time in four days after Philadelphia Federal Reserve President Charles Plosser said the economy is on “firmer footing” and the central bank’s decision to cut debt purchases was a step in the right direction.