March 29, 2017 / 2:35 PM / 4 months ago

TREASURIES-Yields slip as Trump uncertainty continues to weigh

3 Min Read

    By Gertrude Chavez-Dreyfuss
    NEW YORK, March 29 (Reuters) - U.S. Treasury debt yields
inched lower on Wednesday in generally light volume, pressured
by lingering uncertainty surrounding the Trump administration's
economic policy.
    After the legislative debacle last Friday when President
Donald Trump's fellow Republicans withdrew their own healthcare
bill, investors worried about other reforms on his economic
agenda that could get waylaid as well, such as taxes.
    Tom Simons, money market economist at Jefferies & Co in New
York said politics remains a major driver in the Treasuries
market.
    "We've moved on from the theme of Trump getting things done
and a new paradigm for economic policy to what is even possible
to get done," Simons said. 
    "We don't have good news coming out of Washington yet. And
until we do so, more and more doubt is going to be thrown into
the outlook."
    Yields, though, picked up a little bit after Chicago Federal
Reserve President Charles Evans said on Wednesday he supports
further rate hikes this year, given progress on the Fed's goals
of full employment and stable inflation. Evans, a voter on the
Federal Open Market Committee, has been one of the more
consistent proponents of low interest rates.             
    In mid-morning trading, benchmark 10-year notes            
were up 4/32 in price to yield 2.392 percent, down from 2.409
percent on Tuesday. Yields were down from a three-month high of
2.63 percent set two weeks 
    U.S. 30-year bond prices rose 6/32            , yielding
3.003 percent, down from Tuesday's 3.013 percent.
    On the front end of the curve, U.S. two-year yields were at
1.277 percent           , compared with 1.298 percent late on
Tuesday.
    The yield gap between shorter-dated and longer-dated
Treasuries continued its flattening trend, which has persisted 
over the last two weeks. On Wednesday, the spread between the
two-year and 10-year                were at 111.20 basis points,
unchanged from Tuesday.
    A flat yield curve is often a sign of a looming slowdown.

 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick
Zieminski)
  
 
 

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