NEW YORK — Treasury 10-year note yields traded Tuesday at almost a two-month low as the Federal Reserve is expected to trim monthly bond-buying while holding its short-term interest-rate target at a record low after another report showed the U.S. economic recovery remains on an uneven path.
U.S. debt fell on speculation the Fed will taper monetary stimulus this week and as a recovery in emerging-market equities from a three-day slump damped demand for the safest assets.
The Treasury sold $32 billion of two-year securities, the first auction in sales of $111 billion of notes this week. “The market is priced for a continued taper and is probably going to get it,” said Michael Lorizio, senior trader at Manulife Asset Management in Boston. “The effectiveness of the policy is waning, and that’s a big part of the reason why they’re tapering, not necessarily because the economy is on the verge of overheating by any means.”
Benchmark 10-year yields were little changed at 2.75 percent, Bloomberg Bond Trader data show.
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