By William Watts, MarketWatch
NEW YORK (MarketWatch)--U.S. Treasurys gained ground on Friday,
pulling down yields as investors stepped back into the market after
a Federal Reserve-inspired selloff.
The yield on the 10-year U.S. Treasury (10_YEAR) fell 4.5 basis
points to 2.585%. Yields move in the opposite direction of
prices.
The yield on the 2-year note (2_YEAR) was up half a basis point
at 0.573%, while the 30-year T-bond yield (30_YEAR) fell 6 basis
points to 3.297%.
Benchmark Treasury yields had been rising in the past two weeks
as investors prepared for and reacted to a meeting of Fed
policy-markers, which showed some officials had moved up the timing
and pace of their interest-rate hike forecasts. However, investors
reversed course on Friday as they digested the central bank's firm
commitment to near-zero interest rates.
"The overall statement was a bit dovish, which may have helped
with some of today's move," said Sean Murphy, senior Treasurys
trader at Société Générale. He added: "Real money investors are
looking to put some money to work."
Yields had initially risen during Asian and European trading
hours after Scotland voted "no" on a referendum on whether the
country should exit the United Kingdom. Uncertainty over the vote
had previously provided some support for Treasurys, which typically
serve as a haven for investors during periods of political
turmoil.
The yield on the 10-year Treasury rose Thursday to its highest
level since early July, as investors continued to weigh the Federal
Reserve policy statement and comments by Fed Chairwoman Janet
Yellen a day earlier. The Fed maintained its commitment to keep
rates low for a "considerable" period, but indicated that hikes
would come a bit faster than had been expected when they start.
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