Treasury two-year notes were set to be sold today at the second-highest yield at an auction of the security since 2011 on speculation the Federal Reserve will raise interest rates before the debt matures.
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 are losing money for the first time since December as investors demand higher yields with the Federal Reserve signaling that a strengthening economy may prompt policy makers to raise rates sooner than forecast.
U.S. stocks climbed a second day as housing data bolstered confidence in the economy with the Federal Reserve meeting on policy. Treasuries advanced and the yen strengthened amid ongoing turmoil over the Crimea.
Treasury five-year note yields fell to almost the lowest level since June amid speculation demand at a $35 billion sale of the securities will be boosted on bets the Federal Reserve will maintain stimulus.
Treasury 10-year note yields traded in the narrowest range in a month amid speculation whether Federal Reserve Chairman Janet Yellen will acknowledge that the recovery in the U.S. labor market is slowing.
Treasuries rose for the first time in three days as U.S. retail sales unexpectedly fell in January by the most since June 2012 and initial claims for jobless benefits rose more than forecast last week.