Treasuries Fall as Traders Await Fed Speakers for Rate Clues

Treasuries declined as investors look forward to speeches by Federal Reserve policy makers this week for new clues on whether it will raise interest rates by a half point in May.

U.S. government bonds dropped across the curve, with the two-year yield up two basis points to 2.47% as of 11:28 a.m. in New York. The 10-year yield rose two basis points to 2.85%, while a long-maturity Treasury ETF suffered a nearly 30% decline from a peak in August 2020 -- a record drawdown.

Regional Fed chiefs, including James Bullard, Charles Evans and Mary Daly, will discuss the economy this week, while Chair Jerome Powell is scheduled to make final public remarks on Thursday before the U.S. central bank’s pre-meeting quiet period.

“The Treasury bond market will face renewed selling pressures with the yield curve expected to bear-flatten into the Fed’s May meeting,” Mitsubishi UFJ Morgan Stanley Securities Co. strategists, including senior market economist Kenta Inoue, wrote in a research note. “The market will reflect the possibility that the Fed will raise the policy rate by 50 basis points at its meeting in May and June to assert its resolve to slow inflation.”