March 24, 2017 / 1:30 PM / 4 months ago

TREASURIES-Bonds steady as U.S. healthcare vote in focus

3 Min Read

    * Dudley and other Fed officials speak on Friday

    By Karen Brettell
    NEW YORK, March 24 (Reuters) - U.S. Treasuries were steady
on Friday as investors waited on a highly anticipated vote in
Washington on healthcare reform, which is being seen as an
indicator of whether the Trump administration will be able to
pass fiscal stimulus.
    U.S. Republican lawmakers struggling to overcome differences
over new healthcare legislation confronted a stark choice after
President Donald Trump delivered an ultimatum: pass the bill on
Friday or keep Obamacare in place.             
    Delays in passing domestic legislation, including
healthcare, are seen as likely to push back any new fiscal
stimulus, which investors had anticipated would boost growth and
possibly spur a quicker pace of interest-rate hikes.
    “This is being seen as a good litmus test of the rest of
Trump‘s agenda,” said Gennadiy Goldberg, an interest rate
strategist at TD Securities in New York.
    Benchmark 10-year notes             were unchanged in price
to yield 2.42 percent.
    The 10-year yields fell to 2.375 percent on Wednesday, their
lowest since Feb. 28. They are down from a three-month high of
2.63 percent on March 14.
    Speeches by Federal Reserve officials on Friday will also be
in focus for investors hoping for clues on when the U.S. central
bank is next likely to raise interest rates.
    Investors have lowered expectations for a more aggressive
Federal Reserve as doubts about the pace of change in Washington
increase.
    The U.S. central bank raised interest rates last week as
expected but took a more dovish tone on future hikes than some
investors had anticipated.
    The U.S. central bank should begin allowing its massive
portfolio to run off, even as it keeps its target policy rate
low to maintain inflation and unemployment at current levels,
St. Louis Federal Reserve Bank President James Bullard said on
Friday.             
    New York Fed President William Dudley is due to speak later
on Friday.
    Data on Friday showed that new orders for key U.S.-made
capital goods unexpectedly fell in February, but a surge in
shipments amid demand for machinery and electrical equipment
supported expectations for an acceleration in business
investment in the first quarter.             
    

 (Editing by Bernadette Baum)
  
 
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