Treasuries headed for the first monthly decline since August as reports of increased economic growth spurred speculation the Federal Reserve may vote to begin to reduce its bond purchases at a December policy meeting.
Treasuries rose as 10-year note yields at almost the highest levels in eight weeks attracted buyers as Janet Yellen said the U.S. economy must improve before the Federal Reserve can begin slowing bond purchases.
The Treasury’s $24 billion sale of 10-year notes attracted the most demand in five months from a class of investors that includes foreign central banks as the Federal Reserve assesses the future of its bond-buying program.
Risk appetites in American capital markets diminished amid the U.S. budget impasse, pushing Treasury one-month bill rates to the highest since 2008 and Internet stocks to the biggest losses in two years.
Treasuries rose for a second week as U.S. job growth below forecast for a third month added to speculation the economic recovery is too slow for the Federal Reserve to begin reducing asset purchases this year.
Treasury one-month bill rates surged to the highest since 2008 and yields on three-year notes rose as the U.S. sold $30 billion of the debt in the first auction of coupon securities since the start of the government shutdown.
Treasury 10-year notes advanced for a fifth day, the longest streak of gains in almost a year, on speculation low inflation will give the Federal Reserve more flexibility in winding down its government bond-buying program.