Treasuries Rise After Fed Officials Back More Economic Stimulus

Bloomberg (24/9) -- Treasury 10-year note yields fell to almost the lowest level this month as Federal Reserve officials suggested policy makers will maintain the current pace of bond purchases to sustain momentum in the economic expansion. Bonds rose for a second day after Federal Reserve Bank of New York President William C. Dudley said policy makers must “forcefully” push against economic headwinds. Another regional Fed bank president, Atlanta’s Dennis Lockhart, said policy should focus on creating a more dynamic economy. Debate over the U.S. federal budget and the debt ceiling, is also renewing concern of a government shutdown, debt default or near-miss that may roil financial markets. The benchmark 10-year yield fell three basis points, or 0.03 percentage point, to 2.71 percent at 1:05 p.m. New York time, according to Bloomberg Bond Trader prices. The 2.5 percent note maturing in August 2023 rose 7/32, or $2.19 per $1,000 face amount, to 98 6/32. The yield dropped 15 basis points last week, the steepest decline since the period ended July 12. The 10-year note yield fell on Sept. 18 to 2.67 percent, the lowest since Aug. 13. The Treasury is scheduled to sell $33 billion of two-year securities tomorrow, $35 billion of five-year notes the following day and $29 billion of seven-year debt on Sept. 26.