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TREASURIES-Yields inch higher; Fed speakers in focus
June 23, 2017 / 1:35 PM / 3 months ago

TREASURIES-Yields inch higher; Fed speakers in focus

    * Fed's Powell, Bullard, Mester to speak
    * Yield curve steepens from almost 10-year lows

    By Karen Brettell
    NEW YORK, June 23 (Reuters) - U.S. Treasuries yields edged
higher on Friday as investors waited on Federal Reserve speakers
for any new indications on when the U.S. central bank is likely
to next raise interest rates, after inflation concerns this week
sent the yield curve to almost 10-year lows.
    The yield curve between five-year notes and 30-year hit its
flattest levels in almost 10 years as oil prices declined and
concerns lingered over last week’s weaker-than-expected Consumer
Price Index report.
    “For the third month in a row, (CPI) was way below
expectations,” said Jim Vogel, an interest rate strategist at
FTN Financial in Memphis, Tennessee. Continued declines in
non-seasonally adjusted consumer prices played a large role in
the move, he added.
    A decline in oil prices despite positive fundamentals added
to concerns, Vogel said.
    The yield curve                was last at 97 basis points
after flattening to 95 basis points on Thursday, the lowest
since December 2007.
    Benchmark 10-year notes             were down 4/32 in price
to yield 2.17 percent, up from 2.15 percent on late Thursday.
    Fed officials including New York Fed President William
Dudley and Boston Fed President Eric Rosengren both took a
hawkish tone this week on monetary policy, noting that pausing
the tightening cycle could pose risks to the economy.
    Expectations that the Fed will continue on its tightening
course has weighed on short- and intermediate-dated notes, which
are the most sensitive to central bank's policy, even as
longer-dated debt rallied.
    Federal Reserve Board Governor Jerome Powell, St. Louis Fed
President James Bullard and Cleveland Fed President Loretta
Mester are all due to speak on Friday.
    The Fed has emphasized the improving job market and an
expectation that inflation will return to targets despite recent
declines.
    The next major economic release, June’s employment report on
July 7, will be watched for signs of further improvement in the
labor force.
    “If the Fed is going to continue to watch the employment
rate while everyone else watches inflation, the Fed’s probably
not going to veer off its course,” said Vogel.

 (Editing by Lisa Von Ahn)
  
 
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