US Treasuries Yield Recovers Ahead of Fed Expected Taper

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.

Benchmark yields rose a second day even as the U.S. and European Union hit Russian officials with sanctions over Crimea. The Fed is forecast on March 19 to cut monthly purchases under its quantitative-easing strategy to $55 billion while providing guidance on the outlook for interest-rate increases. A measure of general business conditions in the New York area rose as U.S. industrial production climbed the most in six months.

“With no war breaking out over the weekend, it seems the market is able to slow down on the flight-to-quality bid we saw,” said Jason Rogan, managing director of U.S. government trading at Guggenheim Securities LLC, a New York-based brokerage for institutional investors. “There doesn’t seem to be any reason why the Fed won’t continue the tapering process by another $10 billion.”

Benchmark 10-year yields rose four basis points, or 0.04 percentage point, to 2.69 percent at 5 p.m. New York time, Bloomberg Bond Trader data showed. The 2.75 percent note due February 2024 dropped 10/32, or $3.13 cents per $1,000 face amount, to 100 1/2.

Bloomberg

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