Treasuries declined as minutes of the Federal Reserve’s April meeting showed policy makers discussed the need to improve guidance on the likely path of interest rates and tools to raise short-term borrowing costs.
The Treasury’s auction of $32 billion of two-year notes drew a more-than-forecast yield that approached the highest since 2011 amid speculation the Federal Reserve will raise interest rates before the debt matures.
Treasuries fell before the Federal Reserve concludes a two-day meeting where it is forecast to reduce its monthly debt-buying program to almost half of the amount it was purchasing at the end of last year.
Treasuries fell, pushing 10-year yields to a three-week high, as gains in U.S. factory orders and company hiring fueled bets the economy is improving enough for the Federal Reserve to raise interest rates next year.
The difference between yields on 10- and 30-year U.S. Treasuries narrowed to the least since 2010 after the Federal Reserve indicated interest rates may rise faster than anticipated while the pace of growth is moderate.
Treasuries dropped, pushing 10-year note yields up from the lowest level in six months, after a gauge of service industries rose to the highest since August, fueling bets the world’s biggest economy is gaining momentum.